What are Supplementary Payments covered under a Commercial General Liability Insurance Policy?

Supplementary Payments covered under a Commercial General Liability Insurance Policy

One important feature under a Commercial General Liability Insurance Policy Coverage is cover for Supplementary Payments. This article will explain in detail all forms of Supplementary Expenses covered under a CGL Insurance Policy.

What are Supplementary Expenses under a CGL Insurance Policy?

A typical Commercial General Liability Insurance Policy defines Supplementary Expenses as under:

Reasonable expenses (other than defence cost) incurred by the Insured at the request of the Company to assist in the investigation, defence or settlement of such claim or claims which are the subject of indemnity by the Policy;

interest on the full amount of a judgment that accrues after entry of the judgment and before the Insurance Company has paid, offered to pay or deposited in court the part of the judgment that is within the applicable Limit of Indemnity.

Such expenses are called `Supplementary Payments’.

Supplementary Payments do not include any fines or penalties. Another important point to note is that supplementary expenses require the prior approval of the insurance company so as to be covered by the Commercial General Liability Insurance Policy.

What are the different types of Supplementary Payments covered under a Commercial General Liability Insurance Policy?

Following Types of Payments will be covered under the Supplementary Payment Section of a CGL Insurance Policy:

Investigation Expenses: Commercial General Liability Insurance Policy Coverage includes cover for reasonable expenses incurred by the Insured at the request of the Insurance Company to assist it in the investigation or defense of the claim or suit, including actual loss of earnings.

For example, while defending the Insured in the court, defence lawyer appointed by the Insurance Company will request a forensic examination of computer files. Such investigation expenses will be covered under the Supplementary Payments of a Commercial General Liability Insurance Policy.

Bail Bonds Expenses: Most Commercial General Liability Insurance Policies provide coverage for cost of Bail Bonds which are required to be posted because of accidents or traffic law violations arising out of the use of any vehicle which has been covered for the Bodily Injury. Most Commercial General Insurance Policies in India provide coverage upto Rs25000/- for Bail Bond Expenses.

Court Costs: If the Insured loses the case, he might be responsible for various costs such as fees for the lawsuit filed by the injured party, document preparation costs and fees paid to expert witnesses.

Such Court Costs are also covered under the Supplementary Payments Section of the CGL Policy.

Pre – Judgement Interest: A CGL Insurance Policy also provides coverage for Pre-Judgement Interest. Pre-Judgement Interest is designed to compensate the Injured Party for the Injury they have suffered from the time of injury to the time the judgement is awarded by the court.

Post – Judgement Interest: Post-Judgement Interest compensates the Injured Party (Third Party) for any injury or damage suffered from the time a judgement is awarded by the courts until the time the judgement amount is actually paid out. Commercial General Liability Insurance Policy Coverage also includes cover for Post-Judgement Interest.

Why do you need Supplementary Expenses Coverage in your Commercial General Liability Insurance Policy?

When a Third Party sues you for bodily injury or property damage, there are many expenses involved apart from just defence costs and compensatory damages. Such expenses may range from cost of furnishing bail bonds, paperwork charges, hiring forensic experts lost earnings and interest on judgements.

Such charges can add up to a substantial amount and are covered under the Supplementary Payments Section of the CGL Insurance Policy. Supplementary Payments Provision will thus cover a range of expenses apart from just the cost of defending claims and providing damages.

Final Take

Supplementary Expenses Provision in a CGL Policy thus takes care of a lot of miscellaneous expenses which might need to be incurred when the Insured is sued for claims of bodily injury or property damage.

A CGL Insurance Policy is a must have insurance policy for every business to secure itself from claims of bodily injury and property damage. The cost of a Commercial General Liability Insurance Policy is also very reasonable which makes purchasing a CGL Policy a very wise decision.

Qian is a licensed insurance broker for Commercial General Liability Insurance Policy and can assist you in availing a comprehensive limit for CGL Insurance Policy which covers various business exposures related to bodily injury and property damage.

If you wish to purchase a Commercial General Liability Insurance Policy, you can email us at insurance@qian.co.in or call us on 022-22044989. We would be glad to assist you. 

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