ImageCGL Insurance - Commercial General Liability Insurance Policy, Plan, Coverage

The Benefits of Commercial General Liability Insurance

Worldwide Cover

Commercial general liability provides worldwide cover for both territory and jurisdiction. Business operations present across the world could be covered, with the ability to defend litigation abroad

Legal Expenses

Commercial liability insurance indemnifies cost incurred to defend a claim including lawyer and consultant's fees. Policy can be issued on the basis of either Right to Defend or Duty to Defend

Customized Cover

Comprehensive general liability insurance can be tailored to suit unique requirements of the business model or a specific contractual need e.g., waiver of subrogation and additional insured clauses


Multiple Locations

A single combined general liability policy can cover multiple factories, and office premises spread across the country or globally. Certificate of Insurance can be issued for each location separately

Quick Guide to Commercial General Liability Insurance (CGL)

Definition of Commercial General Liability Insurance

Commercial General Liability Insurance Policy (CGL) protects your organization and your business against any liability arising due to bodily injury, property damage or any personal injury caused to a third-party. This essentially means that if your company, product, work, or anything which is associated with your business causes injury to a client (any person) or their property, you could be legally held responsible for it. In such a scenario you may also be required to pay a hefty compensation and this is the time where CGL can come to your rescue.


Commercial general liability policy covers defense cost and the compensation awarded by court for above legal liabilities. Defense cost will include the cost of lawyer fees incurred to defend the company against legal suits.

Types of policies under Commercial General Liability Insurance

There are two types of CGL policies:

  • Claims-made Policy: a claims-made type of CGL policy provides coverage when a claim is made, irrespective of the time of occurrence of the claim event. This type of cover is efficient for a type of claim when there is a difference in date or there is a delay between the occurrence of the event and date on which the claimant filed the claim. But not to forget here that the policy only covers for the claims that are made when the policy is active. The date of first coverage is defined as the retroactive date. On subsequent renewals of the policy, the retroactive date would be mentioned to denote continuity in coverage.
  • Occurrence Policy: an occurrence policy type of CGL insurance covers for all the claims made for injuries sustained during the period when the insurance policy is live. Under such a contract, the insured can request for compensation for the damages that have occurred during the policy period.

Example of Commercial General Liability Insurance

One example of CGL plan can be as follows.


M.R Textiles Ltd. has got a large international order worth INR 50 Crores. The foreign company insists on sending Mr. Jack, a senior employee, to the manufacturing unit of M.R. Textiles Ltd. for a thorough scrutiny of the stocks. Mr. Jack, while moving around the manufacturing units, trips and falls hurting his back.


Now the client sues M.R. Textiles Ltd. arguing that they should have taken care of the work premises. Luckily, M.R. Textiles had a CGL policy bought which covered the compensation as well as the legal costs involved.

Benefits of Commercial General Liability Insurance

Below are the benefits of commercial liability insurance.


Claims for Physical Damage Liability

  • Commercial liability policy covers premises liability by paying for claims from third parties for bodily injury or death suffered in office or factory premises. For example, a guest may slip due to the wet floor in your office premise, and sue for subsequent injuries.
  • CGL also covers claims for 3rd party property damage such as waste from your plant seeping into a neighborhood factory.
  • The Product liability coverage pays for physical damage or injury to a third party due to malfunction of your product.

Damage to Property in Custody

  • CGL offers an add-on called Care Custody and Control. Hereby, goods kept in the custody of the insured are injured against any damage. The sum assured is sub-limited within the overall policy limit.
  • Similarly, rented premises can be covered for Fire Lightning and Explosion damages (FLEXA perils). Specific sub-limit is assigned for this cover.
  • Valet parking for Hotels and Restaurants can be covered. Parking has to be within designated premises under the supervision of the parking/security agency authorized by the hotel.

Add-Ons

  • Commercial public liability offers unique add-ons to expand the scope of coverage. For example, medical expenses incurred for a third-party bodily injury at designated premises can be covered. A sub-limit is defined for the amount payable per person.
  • Extended premises such as swimming pool, cafeteria, health clubs, sauna and Spa, can be covered via a separate add-on.
  • Hotels & Restaurants can buy add-ons for Food & Beverage, and Liquor liability. Claims arising due to consumption of such materials at the insured premises can then be covered.

Need for Commercial General Liability Insurance

A small disruption in your business can mean huge financial loss. Below are the reasons why you need to buy a commercial general liability (CGL) insurance:

  • CGL insurance protects you from third-party claims involving bodily injury and property damage due to negligence
  • A general liability insurance also pays for the medical expenses arising due to physical and mental injuries or shock
  • A commercial general liability insurance policy also reimburses for advertising infringements such as copyright issues, trademark breaches and so on

Documentation requirements for Commercial General Liability Insurance

A proposal form is an essential document for obtaining a general liability policy or plan. Below are some important points to be noted here:

  • A duly filled proposal form is required for obtaining a commercial general liability insurance only for your premises
  • A duly filled proposal form along with list of products, if product liability cover is also required with the CGL policy

Coverage Under Commercial General Liability Insurance Plan

Below are the list of coverages under a cgl plan:

  • Bodily injury: this includes disability or death caused to a third-party.
  • Property damage: this includes partial and total damage to third-party’s property.
  • Advertising injury: this includes trademarks and/or copyright infringements.
  • Lawsuits, investigations and settlements: in case any lawsuit is filed against you, under a cgl insurance, the insurer pays for the investigation and attorney charges.
  • Medical expenses: A cgl insurance policy also pays for any medical expenses incurred due to an injury caused by virtue of operations of your business.

Exclusions Under Commercial General Liability Insurance Plan

Below is a list of exclusions under CGL plan:

  • Willful and expected injury
  • Contractual liability
  • Worker’s compensation and similar laws
  • Damage to insured’s own property

Note: This is just an indicative list. Please refer to your policy document for details of the exclusions.

Frequently Asked Questions

No, general insurance is a much wider term used for all kinds of non-personal insurance. General insurance would include policies for property, motor, shipments and financial and casualty liability insurance. Commercial general liability insurance is a specific type of general insurance policy.
In a business, accidents which are completely outside the control of the owner, is common. While damages to insured’s own property is covered under various types of general insurance policy, it is also important to cover damages caused to third parties due to one's own negligence.

A cgl plan covers the following situations as well:
damage to the rented premise, act of God perils cover, food & beverage cover and lift insurance. Other add-ons which are available in the comprehensive general liability insurance policy are care custody and control cover, designated premises cover, and pollution extension. Hence, a commercial general liability coverage plan can serve as the best way to be assured about your business’ uninterrupted functioning.
CGL Liability insurance offers geographical coverage depending upon the scope of your business operation and setup. As per your physical presence you can choose from India only cover or Worldwide (excl. US & Canada) or Worldwide cover. You can also customize the jurisdiction as per the scope of your business. During the buying process our product experts will help you in deciding the right geography and jurisdiction.

Insuropedia

What is a Commercial General Liability Insurance?

Commercial General Liability Insurance (CGL) protects your business against any liability arising from third-party for bodily injury or property damage and personal injury caused to them. It means, if your company, product, your work or anything associated with your business causes injury to someone like your client or their property, you could be....
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Does General Liability Insurance Cover Property Damage?

Yes, a commercial general liability insurance also covers property damage. A typical commercial general liability insurance helps in covering losses or damages which may arise due to bodily injury or property damage for which your business may be responsible for paying. Overall, a commercial general liability insurance offers coverage in case of bodily injury....
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What Are Supplementary Expenses Covered By Commercial General Liability Insurance?

Insurers cover various supplementary expenses under commercial general liability insurance. These charges, however, may vary according to different insurance policy providers. Following are some of the supplementary expenses commonly covered by Commercial General Liability Insurance...
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Why Commercial General Liability Insurance(CGL)

Deep Product Knowledge

Leverage specialized underwriters and international experts unique for each line of business.

Cost-effective Insurance

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Quick Turnaround Time

Get cover note issued within 24 hours. All service requests are resolved in pre-defined TATs.

Strong Claims Support

Manage all aspects of claim including insurer, surveyor & TPA co-ordination, and documentation.

Value-Added Services

Receive risk diagnostic reports, themographic studies, policy analysis, and wellness programs.

Policy Administration System (PAM)

Access your insurance policies through single login; service requests, MIS, and renewal alerts.