General Liability
4 min read

Understanding Civil Liability

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Liability coverage is an integral part of all insurance contracts, whether it be automobile, home, business or other. To better understand its importance and implications, here are a few examples that can occur at any time.

Your Personal Civil Liability

You are on vacation in Florida and you have rented a condominium. During your stay, while cooking, you accidentally set the condominium on fire. The damage amounts to 500 000 $ CAD. The owner of the building decides to sue you for the damage to the building. If you have a homeowner's policy, the personal liability coverage included in it will pay for the damage to the condominium. If you do not have homeowner's insurance, then you will be responsible for paying the amount claimed and any legal fees incurred in your defence out of your own pocket.

Your Automobile Liability

You have to go to Boston for a work related conference. It's too late to book the plane: you decide to drive there despite the bad weather. The road is snowy, icy and stormy. As you near your destination, you lose control of your vehicle, hit a pedestrian and end up on the property of a private residence, breaking the fence in the process. The pedestrian sues you for injuries sustained in the accident and the homeowner sues for damage to his fence. The claims total 250,000 $ CAD. Your automobile insurance policy includes liability coverage for 1,000,000 $ CAD. Your auto insurer will pay for the cost of the lawsuit and any damages you are ordered to pay.

Your Professional or Commercial Civil Liability

You operate a ski resort. It is the official opening of the season. During the first few days, the snow cannons are put to work and can be found everywhere along the slopes. Once at the top of the mountain, a young man impatient to enjoy the first minutes of his favorite sport begins his first run. But in the middle of the trail, there is a snow cannon that one of your employees forgot to remove. The young man, delighted with his first run, does not see the cannon, which is partly hidden behind a hill, and collides with it. He suffers serious injuries and decides to file a 20,000 $ lawsuit against the ski resort for negligence. Under the ski resort's commercial insurance policy, your insurer will cover the claim.

There are also other types of liability insurance, such as directors and officers and professional errors and omissions. The latter is even mandatory for professionals, such as accountants, lawyers, notaries, doctors, etc., in order for them to have the right to practice.
These few examples may seem out of the ordinary, but they undoubtedly illustrate very effectively the merits of having civil liability coverage.
If you are now looking at the slippery ceramic floor of your store with a new set of eyes, don't wait for an accident to occur: contact your broker today for the best protection adapted to your needs. 

Broker's Tip

The maximum amount of liability insurance an insurer can provide is 2,000,000 $ CAD for an individual's automobile or home and 5,000,000 $ CAD for a business. However, it is possible to increase this amount by purchasing a supplementary liability insurance policy called "umbrella".