1. Increases Total Limits
It raises the total dollar amount available to pay for a catastrophic loss.

2. Closes Coverage Gaps
It ensures that “unintended holes” in your primary policy don’t leave you exposed.

Excess vs. Umbrella: The Difference

Excess Coverage: Piles more money on top of your existing CGL limits. It follows the same rules as your base policy.

Umbrella Coverage: Adds higher limits AND can fill gaps where your primary policy might be silent.

Watch Your “Attachment Point”

This is the exact dollar amount where your umbrella policy kicks in.

If this point is too high, you might have a “gap” between your primary insurance and your umbrella protection.

A neighbouring business sued West Van Lions Gate Cleaners, alleging that dry-cleaning chemicals had contaminated the groundwater. The dry cleaner turned to their insurers (Intact and Economical), but the claim was denied.

The Ruling: The B.C. The Court of Appeal ruled in favour of the insurers. Because the CGL policy included a strict Pollution Exclusion, the insurance company had no duty to defend or pay for cleanup costs.

MYTH: “My CGL covers all business risks.”

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REALITY: Standard policies exclude professional errors, cyber attacks, and pollution.

MYTH: “All policies are the same.”

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REALITY: Wording varies wildly between insurers. Small differences in exclusion language can change a claim outcome.

Key Commercial Liability Trends (2025):

• Market Stabilization After Hard Market Cycle

  After several years of hardening markets, marked by significant premium increases and capacity restrictions, the commercial market is showing signs of stabilization. Increased competition among insurers is helping to moderate premium increases.

• Rising Contractual Requirements

  What was once a standard $2 million CGL requirement has commonly increased to $5 million or more, driving demand for excess and umbrella coverage.

• Expansion of Environmental Liability Concerns

  With increasing focus on environmental protection and stricter regulations, more businesses are recognizing the need for specialized environmental liability coverage beyond their standard CGL policies.

• Social Inflation Impact on Claims Severity

  Social inflation, the tendency for insurance claims to rise in cost above general economic inflation, continues to drive higher settlement amounts and judgments, particularly in bodily injury cases.

• Growing Emphasis on Risk Management Services

  Insurers are increasingly offering value-added risk management services to help businesses mitigate liability exposures, potentially qualifying them for more favourable coverage terms and pricing.