Why bundling CGL + Commercial Property lowers total cost

Bundling Commercial General Liability (CGL) and Commercial Property on a single package policy often triggers a carrier “package credit” that reduces the overall premium versus placing the lines separately. In Canada, insurers price the combined risk and operational efficiencies of a package, and those credits are one of the most reliable levers for small and mid‑sized firms to control total insurance spend. Credits are discretionary and underwriter‑driven, but they are common across mainstream Canadian markets.

Typical package‑credit band (2025)

• What Summit brokers most commonly see in 2024–2025: 5–25% package credits when CGL and Property are placed together on a package policy. Actual credits vary by insurer, occupancy, construction, protection (e.g., sprinklers, alarms), revenue, limits, deductibles, and loss history.

• Expect narrower credits for higher‑hazard occupancies or adverse loss history, and wider credits for sprinklered, well‑protected, low‑loss risks with higher deductibles.

How the math usually works

1) Add base premiums for eligible lines (e.g., CGL + Property contents/building/equipment). 2) Apply the carrier’s package credit to the eligible premium subtotal. 3) Add any policy fees (insurer, broker, finance fees if applicable). 4) Add applicable provincial taxes/levies that appear on invoices (for example, Ontario’s 8% Retail Sales Tax (RST) on taxable insurance premiums; premium taxes charged to insurers are typically embedded in premium and not shown as a separate line to the buyer). See province cautions below for details and sources.

Worked examples (illustrative only)

Assumption for taxes in these examples: business located in Ontario; apply 8% RST to the discounted premium. No separate line is shown for provincial premium taxes paid by insurers (embedded). Numbers are rounded and for illustration only; your quote will differ.

Notes:

• “Pre‑tax premium after credit” = (Base CGL + Base Property) × (1 − package credit).

• If your business is in a different province, the invoice tax line(s) can differ. See next section.

Province tax cautions (read before comparing quotes)

The line items you see on an invoice can include: (a) provincial premium taxes paid by insurers (typically embedded in the premium), and/or (b) provincial retail sales taxes expressly charged on certain insurance premiums to the purchaser in some provinces. Rates, what is taxable, and whether a tax is embedded or shown separately vary by province and by whether insurance is placed with a licensed or unlicensed insurer.

Selected references and examples (non‑exhaustive; exclude Quebec):

• Ontario: 8% Retail Sales Tax applies to taxable insurance premiums paid by the purchaser; separate from HST. See Ontario Ministry of Finance guidance on Insurance and Benefits Plans (RST at 8%) and the Ontario insurance premium tax rates for insurers (3.5% property; 3% other) which are generally embedded in premium paid to insurers.

• Saskatchewan: PST of 6% applies to insurance premiums with certain exceptions; see Government of Saskatchewan updates and the Insurance Premiums Tax overview (insurer premium taxes: 4% property; 3% life/accident/sickness/hail) plus the 2017 PST implementation notice confirming application to insurance premiums (news release).

• Newfoundland & Labrador: RST of 15% applies to many property and risk insurance premiums billed to purchasers; see the provincial RST on insurance premiums FAQ.

• British Columbia: Insurance Premium Tax (IPT) is paid by insurers and embedded (4.4% on property/auto; 4% on most other lines). Purchasers directly pay 7% tax only when using unlicensed insurers. See the Insurance Premium Tax Act (rates) and the province’s unlicensed insurance guidance.

• Alberta: Insurer premium taxes are 4% on “other” insurance and 3% on life/accident & sickness; typically embedded in premium. See Alberta insurance premiums tax and tax overview.

• Manitoba: Insurer premium taxes are 4% on property and 3% on other insurance; typically embedded in premium. See Manitoba Finance – Insurance Corporations Tax.

Practical guidance:

• When comparing quotes across provinces, normalize for any explicit RST/PST shown on the invoice (e.g., 8% in Ontario, 6% in Saskatchewan, 15% in NL). Embedded insurer premium taxes (IPT) will already be reflected in the premium.

• For cross‑provincial risks, taxes are generally prorated to the location of the risk or the insured’s residency, per provincial rules.

What widens or narrows the bundle discount

• Risk profile: construction/occupancy/protection (e.g., masonry vs. frame; cooking exposures; sprinklers/monitoring).

• Limits/deductibles: higher deductibles and disciplined limits often price more competitively.

• Revenue and area: higher foot traffic or sales can drive CGL rates; high‑value stock drives Property rates.

• Loss history: frequency and severity in prior 3–5 years materially affect credits.

• Program design: adding Business Interruption, Equipment Breakdown, Crime and Cyber as part of a coherent package often improves pricing efficiency relative to standalone placement.

How Summit helps Canadian businesses

• Independent market access: as a fully independent Canadian brokerage, Summit shops multiple carriers to secure the right package credits and terms for your exact risk profile (Business Insurance).

• Line expertise: our team routinely structures CGL + Property packages alongside BI, Equipment Breakdown, Crime and Cyber to align coverage and maximize carrier efficiency (CGL, Commercial Property).

• Claims support: dedicated advocates streamline the process end‑to‑end (How claims work).

• Transparent compensation: we disclose how we’re paid, including commissions and any fees, before binding (How we get paid).

Important disclaimer

• Illustrations are not quotes or binding indications and exclude optional coverages and fees unless specified.

• Taxes/levies are subject to change by province and may depend on whether insurance is placed with a licensed or unlicensed insurer.

• Summit Commercial Solutions serves businesses across Canada outside of Quebec.