Every action you take in your daily life counts and can impact your environment. It’s important to understand what actions you could be held responsible for.

If you have a home or car insurance policy, you’ve probably come across the term “liability insurance”. But what does it mean? And more importantly, what risks does it cover?

Our personal injury lawyers can help you better understand what civil liability insurance is and how it works in Canada.

What is civil liability insurance?

Civil liability insurance, also known as a CGL (Commercial General Liability) policy, protects you and the people in your household against:

  • Personal injury
  • Property damage
  • Immaterial damages (caused involuntarily to an individual or to their property)

The insurer is responsible for compensating third-party victims of loss or accident, in accordance with the details of the contract. Damage caused to others is repaired by financial compensation.

This form of coverage is available for both home and auto insurance. Vehicles insured under your car insurance policy must have liability coverage for you to drive legally in Canada.

In general terms, civil liability insurance covers you for damages involving your civil liability when they lead to claims or legal proceedings. This applies whether the damage occurs in Canada or elsewhere.

What does civil liability insurance cover?

Civil liability insurance in Canada generally covers:

  • Property damage and bodily injury to others caused by the negligence of the insured
  • Damage caused by the insured’s property, such as pets or vehicles

In addition, it can provide protection against lawsuits and related legal costs. Different types of liability insurance, such as personal, professional, car and general liability insurance, cover different areas.

Personal liability insurance

Personal liability insurance covers damage caused by the insured in their private life. It can be taken out by any individual, owner or tenant, and covers damage caused to others, to their home, to pets, etc.

Professional liability insurance

Professional liability insurance covers damage caused by the insured in the sphere of their professional activities. It is mandatory for certain regulated professions, such as doctors or lawyers, and recommended for others, such as craftsmen or consultants.

Car liability insurance

Third party liability insurance for driving covers damage you may cause to others, including other vehicles or property – for example, if you lose control of your vehicle on a slippery road and damage a fence. It also covers injuries you may cause others that are not already covered by a government insurance plan. If you are at fault in an accident, you must have car insurance or you will have to pay for all the repairs yourself.

Homeowners liability coverage

Liability coverage is usually included when you purchase home insurance. This protection covers events involving your home, property or family members – for example, if strong winds blow away your garden furniture and break the window of a neighbouring property, if a visiting child is injured on your property, or if your dog bites a third party and causes personal injury.

In addition, liability insurance covers personal activities that harm others, such as bicycle accidents or sports injuries.

It should be noted that civil liability insurance is mandatory for internships and is required as soon as you enroll at most higher education institutions (an extension of your school insurance). Civil liability insurance is usually included in your home insurance plan and in your car insurance policy.

What are the exclusions of a civil liability policy?

Liability insurance does not cover all types of damages and accidents. Being aware of common exclusions in insurance policies will allow you to avoid surprises.

1. Common exclusions

Typical exclusions include:

  • Intentional damage caused by the insured
  • Illegal activities
  • Acts of war
  • Riot or civil commotion
  • Professional activities
  • Claims in excess of the limits of the insurance
  • Damage to property owned or used by the insured

Be aware that injuries to you or your family members are not covered by your liability insurance policy.

2. Specific exclusions

There may also be specific exclusions within some types of liability insurance policies, such as professional liability insurance. These may include:

  • Bodily injury or property damage caused by the insured while performing professional duties
  • Claims related to the infringement of intellectual property rights
  • Damage caused by professional errors or omissions

Be transparent with your insurer when negotiating your liability insurance policy, even if it means increasing the cost of your coverage. For example, if you are a self-employed worker and you regularly host people in your home, you should disclose this to your insurer.

How much civil liability insurance do I need?

Since the minimum amount of required car insurance varies from province to province or territory, it is important to discuss your needs with your insurer. They will be able to help you determine if your civil liability limit is sufficient.

In general, many insurers recommend a liability limit of at least $1,000,000 to ensure adequate protection against vehicle damage, property damage, injury and even death. It is important to purchase insurance that guarantees you enough coverage to cover all relevant expenses.

What happens if you are sued?

When you are sued for a situation covered by your liability insurance, your insurer is obliged to defend you in court. This means they must pay for a lawyer and any other court costs.

If the courts decide you have to pay to repair the damage you caused, your insurer will pay the money directly to the person who filed the lawsuit against you.

However, if the amount of damage you caused is more than the maximum coverage in your policy, you will have to pay the difference. The insurer will still pay the legal fees, court costs and interest.

Liability insurance from the victim’s perspective

If you are the victim of a situation that engages the civil liability of an individual, organization, institution or municipality, you will have to prove:

  • That the insured was negligent
  • That you have suffered damages
  • That the damage suffered was a direct result of the incident for which the insured is liable

Get help from a personal injury lawyer to assert your rights

Liability insurance is protection against bodily injury and property damage that you may unintentionally cause to an individual or their property. It compensates victims of your actions that engage your civil liability.

Because insurance claims processes can be very complex, we recommend preparing your strategy with the help of a lawyer with expertise in health and personal injury law.

Contact our Montreal law firm today and ask for the support of our legal services. Our lawyers will be able to help you assert and respect your rights with your insurer, so that you receive appropriate financial compensation for the damages you have suffered.

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