Comparing business liability quotes: a worked example with the arithmetic shown
How to compare a CGL renewal with new quotes like for like in Canada, adjusting for endorsements, deductibles, provincial tax and a realistic claim, step by step.
To compare business liability quotes fairly, first make every quote match on limits, coverage parts and endorsements you actually need, then compare three numbers: the total annual cost including provincial tax, the cost if you have one typical claim (premium plus deductible), and whether the limits survive a severe claim. The quote with the lowest headline premium often loses once a missing endorsement is priced in or a higher deductible is applied. The worked example below follows one business through each step.
This guide is part of the business insurance quote checklist. All figures are illustrative, not market prices.
The business in this example
A commercial cleaning company in Mississauga, Ontario: eight employees, $610,000 revenue, cleaning offices and some high-end condominium units. Its main liability risks are:
- a slip on a freshly mopped floor in a client's lobby (bodily injury)
- damage to a client's property it is working on, such as a hardwood floor ruined by the wrong product
- employees driving their own cars between sites
- lost client keys leading to lock replacement
That second risk is important: a standard CGL policy usually excludes damage to property in your care, custody or control, so cleaners, movers and repairers often need an endorsement that adds it back, sometimes with its own limit.
Step 1: write down the renewal as the baseline
| Item | Renewal |
|---|---|
| CGL each occurrence / general aggregate | $2,000,000 / $2,000,000 |
| Property damage deductible | $1,000 |
| Care, custody or control endorsement | Included, $25,000 limit |
| Non-owned automobile liability | Included, $2,000,000 |
| Premium | $2,950 |
| Ontario RST at 8% | $236 |
| Total | $3,186 |
Step 2: collect new quotes on the same structure
| Quote A | Quote B | Quote C | |
|---|---|---|---|
| Limits | $2M / $2M | $2M / $2M | $2M / $2M |
| Deductible | $2,500 | $1,000 | $1,000 |
| Care, custody or control | Not included; available for $180 | Included, $25,000 | Not included; available for $210 |
| Non-owned auto | Not included; available for $95 | Included | Included |
| Premium before tax | $2,480 | $2,790 | $2,620 |
The headline order, before anything else, is A ($2,480), C ($2,620), B ($2,790), renewal ($2,950).
Step 3: add the endorsements you need, then the tax
The company needs both the care, custody or control endorsement and non-owned auto.
- A: $2,480 + $180 + $95 = $2,755; tax $2,755 x 0.08 = $220.40; total $2,975.40
- B: $2,790; tax $223.20; total $3,013.20
- C: $2,620 + $210 = $2,830; tax $226.40; total $3,056.40
- Renewal: $3,186.00
New order: A ($2,975.40), B ($3,013.20), C ($3,056.40), renewal ($3,186.00). The gap between A and B has shrunk from $310 to $37.80.
If you are comparing quotes where one shows tax included and another "plus tax", convert both to tax-inclusive totals first; see tax on premiums by province.
Step 4: test a typical claim
The most likely claim for this business is property damage to a client's floor or fixtures. Test a $9,000 claim under the care, custody or control endorsement:
| Quote | Total premium | Deductible | Cost in a year with this claim |
|---|---|---|---|
| A | $2,975.40 | $2,500 | $5,475.40 |
| B | $3,013.20 | $1,000 | $4,013.20 |
| C | $3,056.40 | $1,000 | $4,056.40 |
| Renewal | $3,186.00 | $1,000 | $4,186.00 |
With no claim, A saves $37.80 over B. With one claim, B is $1,462.20 cheaper than A. The break-even point: A's extra $1,500 deductible costs more than its $37.80 saving once the chance of at least one deductible claim in the year exceeds $37.80 / $1,500, about 2.5%. A business that cleans dozens of units a week will almost certainly exceed that, so B is the better choice on these numbers.
You can repeat this test with your own quotes in the liability quote comparison tool.
Step 5: test a severe claim
Now test a serious slip-and-fall with a $1,400,000 settlement. All four quotes have a $2 million each-occurrence limit, and under a typical CGL the deductible applies only to property damage, so none of them leaves the company exposed beyond its limit. If one quote had only $1 million, it would leave $400,000 uncovered, and no premium saving would justify that. The limits guide explains how to choose.
Step 6: compare the small print
| Term | Why it matters for this business |
|---|---|
| Care, custody or control sub-limit | Is $25,000 enough for the most expensive floors and fixtures you work on? |
| Lost key coverage | Rekeying a condominium building can be expensive; some policies add it as an extension |
| Additional insured for clients | Property managers often require it; check it is available at no or low cost |
| Audit basis | Is the premium adjusted on revenue or payroll after the year? See premium audits |
| Cancellation terms | Short-rate or minimum retained premium if you switch mid-term |
| Payment plan | Total cost if paid monthly; see premium financing |
Step 7: decide and act
On these numbers, quote B is about $173 cheaper than the renewal ($3,186.00 - $3,013.20 = $172.80) with the same features. The company can ask its current broker whether the renewal insurer will improve its offer, giving the competing terms. If not, it binds B to start on the renewal date, asks for new certificates of insurance for clients that require them, and notifies the current insurer in writing that it will not renew.
Frequently asked questions
Why did the cheapest quote have the highest deductible?
A higher deductible removes small claims from the insurer's cost, so the premium drops. For businesses that have frequent small claims, that saving is usually smaller than the extra deductibles paid.
Should I ask my current insurer to match a quote?
You can, through your broker, and with the competing terms in writing. Make sure the comparison is genuinely identical; insurers have no obligation to match.
What if a quote leaves out an endorsement I need and it cannot be added?
Then it is not a comparable quote. Price only options that meet your requirements.
How much weight should I give to the insurer's claims service?
It matters, but it is hard to measure from outside. Ask your broker about the insurer's process for your type of claim, and whether claims are handled by in-house adjusters or independent adjusters.
Sources
- Financial Services Regulatory Authority of Ontario — Ontario insurance conduct rules
- Registered Insurance Brokers of Ontario — Ontario broker licensing and duties
- Insurance Bureau of Canada — general information on business liability coverages
- Ontario Ministry of Finance — retail sales tax on insurance premiums
