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Commercial General Liability Insurance

Secure your Business from Claims of Bodily Injuries and Property Damage

Commercial General Liability Insurance is one of the most important types of Insurance and a must have Insurance Policy for a Business.

In today’s times of increasing litigation, Businesses are at a greater risk of getting sued by Third Parties like their Customers for any Bodily Injury or Property Damage they might suffer.

Companies have been sued for small incidents like a Customer slipping and getting injured within the Business Premises or on account of Company’s Advertisements containing Misleading Information.

Though these incidents are small, an adverse ruling by the Court has resulted in the Company having to pay substantial money towards defending such claims in courts and also towards compensatory damages.

With increasing litigation, such cases are only likely to increase in future.

Hence, every Business should purchase a Commercial General Liability Insurance to protect itself from such Claims.

Commercial General Liability Insurance

What is Commercial General Liability Insurance?

A Commercial General Liability Insurance (also known as CGL Insurance Policy) is a type of an Insurance Policy which reimburses the Insured Person for the Legal Expenses and Compensatory Damages that the Insured becomes legally liable to pay on account of the Bodily Injury or Property Damage suffered by a Third Party by a Company’s Operations, Products or Injuries that occur within the Insured Person’s Business Premises.

Bodily Injury under a Commercial General Liability Insurance Policy is defined as bodily injury, sickness or disease sustained by a person, including death. It is important to read the Commercial General Liability Insurance Policy Wording to ascertain the exact definition of Bodily Injury.

Property Damage under a Commercial General Liability Insurance Policy means

a) Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it, or

b) Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the “occurrence” that caused it.

Property Damage under a CGL Policy specifically covers only tangible property and does not include any damage to electronic data.

What are the Exposures covered under a Commercial General Liability Insurance Policy?

A Commercial General Liability Insurance Policy covers the following Risk Exposures:

  • Premises Liability - Premises Liability Coverage under a CGL Insurance Policy pays for Third Party Claims For Bodily Injury or Property Damage that occurs on the Company Premises on account of business operations.

  • Products Liability - This Section of a Commercial General Liability Insurance Policy will respond if the Company is sued for Bodily Injury or Property Damage suffered when a Consumer uses the Company's Products.

  • Completed Operations Liability - This Section of the Commercial General Liability Insurance Policy covers liability arising from work (other than products) that a Company has finished and/or has been accepted and put to its intended use by the Customer.

What does a Commercial General Liability Insurance Policy Cover

A Commercial General Liability Policy normally covers Defence Costs and Compensatory Damages occurring on account of the following:

  1. Coverage A: Bodily Injury and Property Damage

  2. Coverage B: Personal and Advertising Injury Liability

  3. Coverage C: Medical Payments

What does Bodily Injury and Property Damage Section of a Commercial General Liability Insurance Policy Cover?

The Bodily Injury and Property Damage Section of a Commercial General Liability Insurance covers the Defence Costs and Damages that the Insured Party becomes legally liable to pay on account of the Bodily Injury or Property Damage suffered by Third Parties.

Bodily Injury means any Injury, Sickness or Disease sustained by a person while Property Damage implies any Physical Injury to Tangible Property resulting in its Loss of Use.

Several businesses have multiple risk exposures from their clients and customers suffering from Bodily Injury and Property Damage.

Consider the case of this guest who died in the swimming pool of a hotel.

The hotel was liable for the Damages on account of the death of guest. Businesses have numerous such exposures to Bodily Injury and Property Damage which make them potentially liable.

What are the Add-On Covers under a Commercial General Liability Insurance Policy?

Some common Add-On Covers under a Commercial General Liability Policy are as follows:

  1. Act of God Perils – This Extension Covers liability arising out of a natural catastrophe affecting the Insured Premises resulting in Bodily Injury and Property Damage of the Third Party
  2. Food and Beverages Extension - The Food and Beverages Add-On Cover covers the legal liability arising out of injury/death of the third party which happens on account of consuming food or beverages on the Insured’s premises or after consuming such food products which are sold on the Insured’s premises
  3. Swimming Pool, Beauty Clinic, Gyms Extension (and other similar facilities) under Commercial General Liability Policies covers legal liability arising out of bodily injury and property damage because of using the facilities inside the insured premises
  4. Care, Custody and Control: This extension covers liability arising out of bodily injury and property damage to third party goods which are handed over to the Insured Party for their custody and control.
  5. Valet Parking Liability: This extension covers the liability arising out of damage to the vehicle when the valet parking personnel is driving it and parking it somewhere.
  6. 72 Hours Sudden and Accidental Pollution Coverage: The CGL Policy covers sudden and accidental pollution which occurs within 72 hours and has caused damage. That is certainly an accident. Note that this policy will not cover gradual pollution. Gradual Pollution is covered under a separate insurance policy known as Environmental Impairment Liability Policy.
  7. Liquor Liability: Liquor Liability covers the liability that arises if the customer consumes excessive liquor beyond his capacity and the hotel/restaurant does not prevent its customer from consuming alcohol beyond his capacity, and after consuming the liquor, the customer causes bodily injury or property damage to third parties. Note that the bodily injury or property damage to third parties can occur even outside the premises.
  8. Incidental Medical Malpractice: This is another add-on cover which is important for hotels. Consider a case where a hotel guest falls sick and the hotel doctor treats the guest. However, something goes wrong with the doctor’s treatment as a result of which the guest suffers from illness or injury, the liability will fall on the hotel. This liability will be covered under the Incidental Medical Malpractices Extension of the CGL Policy. This Add-On Cover is more important for places like Malls, Hotels, Cinemas which will have guests.
  9. Vicarious Liability covering Contractors, Sub Contractors, Vendors, Suppliers, Agents etc: This Extension covers the liability arising out of Bodily Injury and Property Damage to Third Parties on account of any action of the Contractors, Sub Contractors, Vendors, Suppliers or Agents of the Insured Party.
  10. Terrorism Legal Liability: This Add-On Cover covers the liability arising out of Bodily Injury and Property Damage to Third Parties on account of Terrorist Acts.
  11. Transportation Extension: Earlier I had shown you the example of a blast resulting in damages. This extension covers liability arising out of bodily injury or damage occurring on account of the product being transported.
  12. Lift and Escalator Liability: This extension covers the legal liability on account of Bodily Injury and Property Damage occurring in the lift and escalators of the building.
  13. Non-Manual Visits of Employees Overseas: This is another important Add-On Cover. This extension covers the liability arising out of third-party property damage or injury caused by the employee on account of his work when the employee goes overseas on a business tour.
  14. Non-owned and Hired Automobiles Liability – This is also a popular Add-On Cover but it is not required in India because a Car Insurance Policy covers the vehicle whereas outside India, Motor Insurance covers the individuals. This Extension covers liability expenses for accidents caused by vehicles which are hired and not owned by a company for its work purposes.

What is Personal and Advertising Injury Liability under a Commercial General Liability Insurance Pol

The Personal and Advertising Injury Liability Section of the CGL Insurance Policy pays for the Defence Costs and Damages that the Insured Party becomes legally liable to pay on account of Personal and Advertising Injury caused in the course of advertising Products or Services.

For example, if a Company publishes an Advertisement that disparages your Competitor’s Products, this may result in the Competitor losing customers which results in Loss of Revenues and Profits.

Consider this famous case of HUL suing Amul over the latter’s Advertisements relating to HUL’s Ice-Creams where Amul disparaged HUL’s products. This is a good example of Advertising Injury.

Personal Injury implies Injuries arising out of offenses other than Advertising.

What is Personal and Advertising Injury Liability under a Commercial General Liability Insurance Pol

What are the Coverages under the Personal and Advertising Injury Liability section of a Commercial General Liability Policy?

The Coverages under the Personal and Advertising Injury Liability Section of the Commercial General Liability Policy are as follows:

  • Invasion of Right to Privacy
  • Slogan or Copyright Infringement in the Insured’s Advertisements
  • Libel, Slander
  • Using someone else’s idea in the Insured’s Advertisements
  • False Arrests, Detention or Imprisonment
  • Malicious Prosecution
What are the Coverages under the Personal and Advertising Injury Liability section of a Commercial General Liability Policy?

What does the Medical Payments Section of a Commercial General Liability Insurance Cover?

The Medical Payments Section of a CGL Insurance Policy pays the Medical Expenses for a Bodily Injury caused by an Accident on the Insured’s Premises or because of Insured’s Operations. This is a No Fault Liability Cover and covers emergency medical expenses to Third Parties who suffer a Bodily Injury or Property Damage within the Insured's Premises. This is called a No Fault Liability Cover as this section does not require the Third Party who has suffered Bodily Injury to make a Claim against the Insured. However, the Insured Party will directly notify a Claim to the Insurance Company. The Insurance Company will pay the Claim under this section (without the requirement of a Legal Notice). This Section does not have any dedutible.

Also, note that this Section will not cover the complete medical expenses for the Insured Party but it will pay only the Emergency First Aid Expenses which the Insured had to incur on account of the Third Party's Injury in order to mitigate loss which might arise due to the Injury.

What does the Medical Payments Section of a Commercial General Liability Insurance Cover?

What are the exclusions under a Commercial General Liability Insurance Policy?

A Commercial General Liability Insurance Policy typically excludes the following:

Exclusions under a Commercial General Liability Insurance Policy

Bodily Injury or Property Damage occurring due to Willful Misconduct of the Insured

Damages that the Insured Person becomes obligated to pay on account of Liability assumed in a Contract

Exemplary or Punitive Damages

Fines or Penalties

Multiplied Portion of any Multiplied Damages Award

Bodily Injury or Property Damage arising out of Actual or Alleged Discharge of Pollutants

Expenses or Loss incurred on Recall or Disposal of Product

Damages or Loss arising out of the rendering of Insured’s Professional Service or Advice

Bodily Injury or Property Damage occurring on account of Infringement or Violation of any Intellectual Property Laws or Rights

Bodily Injury or Property Damage to the Insured's Employee while performing duties related to the conduct of the Insured Person's Business

Will my Commercial General Liability Insurance Policy Cost be higher if I purchase the Policy throug

No, your Commercial General Liability Insurance Policy Cost will not be higher if you purchase a CGL Policy through an Insurance Broker.

In fact, since an Insurance Broker is empanelled with multiple Insurers, they would negotiate your Quotes with multiple Insurance Companies. This will, in fact, enable you to get lower your Commeercial General Liability Insurance Cost compared to the CGL Premium Quote that you would have received by yourself. Additionally, Insurance Brokers would make sure that you obtain a Comprehensive Cover suited to your Risk Exposures.

You can read our detailed blogpost about how much does a Commercial General Liability Insurance Policy Cost?

 

Will my Commercial General Liability Insurance Policy Cost be higher if I purchase the Policy throug
Cover for Bodily Injury and Property Damage
Cover for Bodily Injury and Property Damage
Cover for Personal Injury and Advertising Injury
Cover for Personal Injury and Advertising Injury
Worldwide Cover
Worldwide Cover
Coverage for Ongoing Operations and Completed Operations outside premises
Coverage for Ongoing Operations and Completed Operations outside premises
24/7 Claims Settlement Assistance
24/7 Claims Settlement Assistance

Get a FREE 1 Hour Consultation for your Commercial General Liability Insurance Policy

Let us tell you why a CGL Policy is important:

Every business has some sort of Risk Exposures from their Customers, Vendors etc.

In today’s times where litigation is on the rise, a small suit can make you potentially liable for Damages to the tune of Crores of Rupees.

Consider, a case where a Customer falls in your Business Premises or gets Electrocuted. Such incidents are not uncommon. An Adverse Ruling may make you liable for Huge Damages.

Thus, having a Comprehensive CGL Policy may save you from Crores of Rupees in Damages. A Commercial General Liability Insurance is a must have for your business.

You can get a FREE 1 Hour Consultation for your Commercial General Liability Insurance at support@qian.co.in or 022-22044989 or fill this Contact Form.

Get a FREE 1 Hour Consultation for your Commercial General Liability Insurance Policy

FAQS

A CGL insurance policy covers the following:

  • Bodily Injury and Property Damage
  • Personal Injury and Advertising Injury
  • Medical Payments

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