General civil liability

General civil liability insurance protects the business and its assets from the financial consequences of bodily injury, property damage or moral damage caused to a third party. It covers legal defence costs, compensation for damages and interests.

Warranties

Four warranties are typically included in commercial general civil liability insurance:

• Warranty A – Bodily injury and property damage
• Warranty B – Personal harm attributable to public advertising
• Warranty C – Medical fees
• Warranty D – Tenant’s liability (leased spaces and premises)

Conditions and exclusions may apply depending on the scope of coverage.

Civil liability risk examples

A company may be held liable for various reasons. The risks to which a company is exposed are related to its activities, products and places of business. Here are a few examples.

Product: Use, manufacture and/or sale:

• A customer gets food poisoning after eating at a restaurant.
• An electrical failure in the dishwasher causes a short circuit after its installation, resulting in a fire and extensive damage to the client’s home.

Work on a construction site, an industrial site, at a private home:

• A heating contractor accidentally sets fire to the building while trying to fix a problem with a furnace gas line at a client’s home.
• There’s an explosion on a construction site and the debris from the blast is flung over a very large area, causing severe damage to nearby homes.

Place of business – damage to people visiting the land or building:

• A client falls after slipping on a patch of ice on a gas station’s land.
• A ski lift falls down and causes injuries or the death of a client or operator.

An evaluation tailored to the company

It’s important to determine in advance which events and risks are most likely the company may be held liable for by third parties. Risk management is a key tool that can help any organization in this process.

Fault is not always needed

Know that it’s not always required that there be fault on the part of the impleaded company. Also, certain provisions of the Civil Code of Québec refer to strict liability to ensure that victims are better protected.

Additional insurance

Additional insurance is available, as the insurance and coverage amounts being offered may not be sufficient. The nature of the business may require additional coverages. There are two other types of business insurance that can provide additional coverage to fill in the missing warranties.

• Additional civil liability insurance is generally supplemental insurance that complements the primary civil liability policy contract. It provides the same warranty as the primary insurance contract, but only provides higher coverage limits. It comes into play after the insurance amount on the primary contract has been paid.

• Umbrella> civil liability insurance provides warranties for occurrences that other policies don’t cover. Its conditions are different, and it comes into effect when there’s insufficient basic insurance coverage. In addition to offering higher limits, it also provides a more extensive coverage for covered risks. It can apply as a complement to several primary insurance policies.

What is a primary insurance policy?

The general civil liability contract is the primary insurance policy, which applies first. A company may have multiple insurance policies to cover the same loss. For example, a company takes out insurance to cover general civil liability and has additional umbrella civil liability insurance.

There are other types of business civil liability insurance. See the other contents of this section for details.