Liability Coverages

Commercial General Liability - Covers four types of exposures namely (A) bodily injury and property damage liability, (B) personal injury liability, (C) medical payments and (D) tenants' legal liability. Coverage includes products and completed operations, but such coverage can be excluded (See next paragraph). A products loss arises after a product has been sold, is away from the Insured's premises, malfunctions and causes damage (e.g. a dishwasher overflows in a residence and damages hardwood floor). A completed operations loss arises when an operation is complete or abandoned (e.g. repairman fixes dishwasher and it subsequently overflows because the repair was improperly performed).

Comprehensive Liability - Covers (A) bodily injury liability and (B) property damage liability. Coverage includes products and completed operations, but such coverage can be excluded (See last paragraph below). Unlike the standard Commercial General Liability policy, the standard Comprehensive General Liability policy does not include personal injury, medical payments, blanket contractual, occurrence property damage, broad form property damage, contingent employers liability, employees as insureds, attached machinery, broad form automobile liability (referred to here as automobile liability restriction) and blasting, pile driving, weakness of support.

Owners’, Landlords’ and Tenants’ Liability - Covers (A) bodily injury liability and (B) property damage liability. Coverage excludes products and completed operations.

Tenants’ Liability - Covers liability for damage to property leased to or rented by the Insured where the damage is caused by the Insured's operations and the Insured is held legally liable.
There is very little reason for not carrying tenant's legal liability as even owners of the buildings they occupy would be at risk for premises they may rent from time to time (e.g. a hotel room, a meeting room, etc.). Tenant's legal liability is covered under the Commercial General Liability policy, but it is subject to the "Each occurrence limit". The "Each occurrence limit" also applies to the sum of compensatory damages for bodily injury and property damage, tenant's legal liability and medical payments. It could be advisable, therefore, to arrange separate tenant's legal liability coverage even when the Insured is covered by a Commercial General Liability policy. The Comprehensive General Liability policy does not cover Tenants' Legal Liability.
The broad form covers property damage by any cause not otherwise excluded.
The limit chosen should be equal to the maximum exposure at any one location. A rule of thumb guide for the limit required is ten times the annual gross rent.

Non-Owned Automobile Liability - Indemnifies the insured for the legal liability arising out of the operation of non-owned vehicles used in the Insured's business (e.g. an employee using his own car on a business errand). It is a general rule of law that an employer is responsible for the negligent acts or omissions of an employee in the course of employment and hence could be involved in claims arising from the employee's negligent operation of the employee's own vehicle.

Worldwide Non-Owned Automobile Liability - Indemnifies the insured for the legal liability arising out of the operation of non-owned vehicles used in the Insured's business (e.g. rental of an automobile while abroad). The standard non-owned policy also provides for rental of an automobile, but coverage is restricted to rentals in Canada or the United States of America.

Voluntary Compensation - Pays voluntarily the benefits on account of bodily injury to employees (including resulting death) accidentally suffered by such employees and arising out of and in the course of employment. Coverage applies whether or not the bodily injury could give rise to liability imposed by law upon the Insured. This extension is used to provide compensation for employees not covered under the various Workers' Compensation Acts. Benefits are for (1) loss of life, (2) temporary total disability, (3) permanent total disability and (4) dismemberment and are based on a multiple of a weekly indemnity. Funeral expenses are also covered and a separate limit applies.

Professional Liability - (Also known as errors and omissions insurance or malpractice insurance). Covers all sums which the Insured becomes legally obligated to pay as damages because of injury arising out of the rendering of, or failure to render, professional services in the practice of the Insured's profession. Although Commercial General Liability and Comprehensive General Liability policies do not generally exclude coverage for professional services, in practice, it is common for Insurers to exclude such coverage, especially if a known exposure exists. Endorsements are available to add back coverage for certain exposures but they are usually restricted to claims arising from bodily injury and/or property damage.
Professional liability policies are designed to specifically cover professionals who give advice, counselling or administer health care. Physicians, dentists, pharmacists, engineers, architects, lawyers, accountants and insurance brokers are in this category. Barbers, hair stylists, beauticians, morticians, veterinarians, optical establishments and hearing aid establishments also require special types of professional liability insurance. Professional Liability is usually written on a Claims-made form.

Directors’ and Officers’ Liability - Covers directors and officers of corporations and institutions for the personal liability they incur based on some allegation of negligence, error or omission and defined as a "wrongful act" in managing corporate affairs and where the injured party has suffered loss. Payment under the policy may be made directly to directors and officers for their personal liability or to corporations when they reimburse directors and officers for liability incurred.
Exposure to directors' and officers' liability applies to large conglomerates, smaller operations and non-profit organizations including entities such as condominium corporations.

Employers’ Bodily Injury Liability - Protects the insured for claims of bodily injury to an employee of the insured arising out of and in the course of employment. Coverage is similar to that provided under the various Workers' Compensation Acts and applies to categories of employees excluded from coverage under those Acts or in jurisdictions where there is no Workers' Compensation legislation. Categories of employees often excluded under the Acts include farm employees, domestic servants, certain casual employees and certain clerical employees.

Wrap-Up Liability - Covers all contractors, sub-contractors and the owner while involved in a construction project. It has the advantage of providing one policy with one insurer so that when a suit is brought against, for example, the owner and several sub-contractors, the duplication and extra expense of conducting an investigation and mounting a defence separately for each defendant would be saved.

Pollution Liability - Covers pollution and is usually written on a claims made basis. There is only a limited market for this coverage. For risks with minimal pollution exposures, a Limited Pollution Liability Extension may be added to the Commercial General or Comprehensive General Liability Policy.

Excess Liability - An excess liability policy provides extra limits of insurance over an underlying policy in force. Excess policies commonly follow the provisions of the underlying policy, hence "follow form". Their purpose is to add higher limits of liability and they do not broaden the coverage.

Umbrella Liability - An umbrella policy has three main functions:
1. Provides additional limits over and above primary and stated underlying policies such as Commercial General or Comprehensive General Liability policies, Tenants' Legal Liability policies and Owned and Non-Owned Automobile Liability policies.
2. Provides broader coverage (e.g. advertising, property leased or occupied by or in the care custody or control of the Insured, non-owned aircraft, non-owned watercraft, full worldwide territorial cover, employers liability). Some insurers may exclude certain broader coverages.
3. Provides an aggregate drop down feature, that is, it drops down to cover losses where the underlying policy aggregate has been exhausted.