What CGL is for
Commercial general liability insurance pays for what you are legally responsible for when your work hurts someone else or damages someone else's property, and it pays the lawyers who defend you against the claim. The Insurance Bureau of Canada describes it in exactly those terms: bodily injury or property damage to others, plus the cost of defending a lawsuit.
On a commercial site "someone else" is everyone who is not you: the owner, the general contractor, the other trades, the public walking past the hoarding. Your drywall crew floods a finished suite. Your electrician's ladder falls through a storefront window. A visitor trips over your cords. Those are CGL claims.
CGL is not WCB, and you usually need both
| WCB Alberta | CGL | |
|---|---|---|
| Who it protects | Your workers, if they are hurt on the job | Everyone else your work affects |
| What it pays | Wage loss, medical and rehab costs | Injury and property damage claims against you, and your defence |
| Where it comes from | A WCB Alberta account | A private insurer, through a broker |
WCB also protects you from being sued by the workers it covers. It does nothing for the owner whose floor you damaged. That is the gap CGL fills, and it is why a GC asks for both a WCB clearance letter and a certificate of insurance.
What a CGL policy usually does not cover
Read your own policy, because wordings differ. But these are typically handled by separate insurance, and commercial contracts list them separately for that reason:
- Your tools and equipment. Theft or damage to your own gear is contractors' equipment insurance, not liability.
- Your vehicles. Owned and leased vehicles need an automobile policy. CGL can be extended for non-owned automobiles, such as an employee driving their own truck on a company errand.
- Redoing your own work. Liability policies are built to pay for accidental damage to others, not to warranty your workmanship. If your tile fails, CGL is about the damage it causes, not the cost of re-tiling.
- Pollution. Spills and contamination are commonly excluded and written as separate contractors' pollution liability.
- Design work. If you design as well as install, that is professional liability.
What a GC will ask you for
A certificate of insurance
A certificate is a one-page summary your broker issues: insurer, policy number, dates, limits, and who is named on it. Canadian certificates say plainly that they are issued for information only and do not amend, extend or alter the coverage. The policy is what pays, so the certificate is only as good as the policy behind it. Expect to send a fresh one whenever your policy renews.
A limit, per occurrence
The limit is the most the insurer will pay for one occurrence. Your subcontract sets the number. Standard Canadian subcontracts such as CCA 1 contain a clause naming the minimum general liability insurance for the subcontract work, and a GC's own subcontract form will too.
For context on where the GC's number comes from: on jobs built under the standard CCDC 2 contract, owners often attach CCDC 41, the industry's standard insurance schedule. The 2020 edition requires the GC to carry general liability of at least $10,000,000 per occurrence, a $10,000,000 aggregate for completed operations, and a deductible of no more than $10,000. The coverage must be no narrower than the standard IBC Form 2100 wording and must include non-owned automobile liability. GCs then decide what to require from each trade, and that can be lower than their own limit.
If the limit you are asked for is more than your policy carries, ask your broker about an umbrella or excess policy that sits on top of it. CCDC 41 expressly allows the limit to be reached that way.
Additional insured
Many GCs ask to be named, often with the owner, as an additional insured on your policy. It lets them claim under your policy for liability arising out of your work, so a claim about your work does not land on their policy. It is added by an endorsement from your insurer. Writing it on the certificate does not create it.
Completed operations
Some claims arrive after you have left the site: a leak behind a wall you closed in, a fixture that drops a month after handover. That is the products-completed operations hazard, and it is why CCDC 41 sets an aggregate limit for it. Check that your policy includes it and for how much.
Questions to put to your broker
- What is my per-occurrence limit, and my completed operations aggregate?
- What is my deductible? Some contracts cap it. CCDC 41 caps the GC's at $10,000.
- Is non-owned automobile liability included?
- Can you add a GC and an owner as additional insureds, and how fast can you issue a certificate naming them?
- If a contract asks for a higher limit, what does an umbrella cost?
- What does my policy exclude that a commercial subcontract is likely to ask for: pollution, tools, professional liability?
Where this fits on Syndex
Insurance is something you and the GC settle in your subcontract. Syndex does not check or sell insurance. What we do review is your WCB clearance letter, because that is what a GC reads beside your reply. The clearance letter guide covers how to get one.
Working commercial jobs around Calgary? Join as a subcontractor. It is free.