Commercial general liability insurance policy offers protection to business owners by covering the defence cost and other legal costs arising due to third party liability and product liability claims. It also provides coverage against premises liability claims arising due to injury or damage.
If your business involves face to face interactions, invites visitors or clients at your premises, sells a product or render any service then there are chances of your client being not satisfied with your product or service. Your client or visitor may sue you if they get injured on your premises. All such mishaps invite lawsuits against your business. Third party claims or client-related lawsuits could pierce a deep hole in the pocket and could damage the business rapport. Hence it is very important to buy commercial general liability insurance.
This comprehensive general liability insurance covers litigation cost and settlements in case of third-party bodily injury or property damage due to your operations. CGL covers product liability claims as well. Commercial liability policy actually cuts down the cost of legal liabilities if you fail to take care of your clients and stakeholders at the right time.
This article is a brief guide of commercial general liability insurance policy, which will help you understand this insurance.
Who should buy CGL insurance?
Every business owner, sole proprietors, partnership firms, Joint venture, Hotel owners, Hospitals, IT company owners, BPO should buy CGL policy. In a nutshell, every business owner regardless of the size should buy CGL Insurance. Professionals operating in their own working space like medical clinics, consulting firms or their personal office should avail CGL insurance cover.
What is covered under CGL policy?
Combined general liability offers the following cover:
1.Third party lawsuits: Any bodily injury or property damage occurring at your premises to someone is covered under public liability insurance cover offered by CGL policy. Insured will get legal cost coverage and settlements coverage. But combined general liability does not cover your employees and your property.
2. Advertising injury such as infringement of trademark and copyright are covered.
3.Medical Payments Coverage: Medical payments incurred due to injuries to your client or visitors to your premises will be covered under this policy.
4. Legal cost is covered and legal assistance is provided by the insurer.
From where the liabilities can arise?
Your client, visitors or any other person apart from your employees can cause legal liability for your business. If your stakeholders face catastrophe and any bodily or non-bodily damage in your premises, you will be at default.
For example, a visitor falls on the wet floor of your office premises and injured badly. In such case, medical payments will be provided by the insurer if you have public liability insurance coverage in this policy. Otherwise, you will bear the repercussions. It is better to have combined general liability insurance rather than regretting a client-related lawsuit.
Your business may also be liable for its sold product if the user of your product faced any injury or damage due to the defect in your product. In such cases, you are liable to pay compensation if the client sues you for the same. It is a smart move from your side to be prepared for such contingencies and buy a commercial general liability policy.
Apart from the above instances, liabilities also arise from certain offence such as Libel, slander, infringement of copyright or use of advertisement idea of some other firm etc.
How to decide correct coverage?
An optimum sum assured is determined on the basis of probable risk exposures, the potential risk of the product served, business locations and turnover of your business. Before buying a CGL insurance policy, one should compare the cost, coverage and benefits offered by different insurers.
What is not covered by CGL?
Following are the exclusions in CGL insurance policy:
1. Any damage to the property and product of the insured is not covered.
2.War and perils
3.Expected and intentional damage
6. Punitive damages are not covered
8.Workmen Compensation and similar laws
9.Pure financial loss
10. Deliberate non-compliance with any statutory provision
It is crucial to read the list of exclusions carefully. Since there are minor variations in the list of exclusion as per the terms of insurers and it is important to assess the scope of coverage under the light of exclusions.
Apart from standard exclusions, your claim will get rejected in cases of issues occurred before the retroactive date or the date of policy issuance, Claims related to deficient services or negligence are not covered in commercial general liability insurance. Separate professional indemnity policy should be purchased to cover claims related to errors and omissions.
Unexpected accidents at your premises can put a financial strain on the business. Be it a small business owner, retailer or an IT firm, CGL insurance adds a protective layer to the business operation and ensure a sense of security against legal expenses.
SecureNow helps you to place your CGL policy in a cost-effective manner by making the insurance simple, quick and hassle-free. We provide competitive quotes and additional services such as dedicated servicing team and single point of contact in order to provide the best of our services to our clients.