A typical commercial general liability insurance covers claims of bodily injury or property damage. Your company may become liable to pay for such claims. A CGL insurance policy comes with comprehensive coverage. Under commercial general liability insurance, there are two coverages available— liability cover and medical expense cover. The liability cover provides coverage for third-party damage when the policyholder has a legal obligation to pay. The insurer offers medical expense coverage regardless of whether the policyholder is obligated to make a payment.
A medical expense cover includes expenses related to injury or accident only. On the other hand, a general liability cover includes various types of liabilities such as advertising injury and property damage.
The medical expenses cover provides coverage for accidents or unfortunate events at the construction site, irrespective of the insured’s obligation to pay compensation. For example, if a customer falls in your retail store and suffers a fracture, the compensation for their injury falls under the medical expenses cover.
As medical expenses cover would settle for all the expenses incurred as the result of an accident or injury caused to third-party while conducting business, there is no need to prove your negligence as a business owner. It means, you would simply need to file a claim with the commercial general liability insurance company and the insurer would settle for losses or damages. The worker’s compensation insurance policy covers injuries sustained by your employees.
Further, it is important to note that when the commercial general liability insurance company settles the medical expenses, the insurer is not acknowledging responsibility for the injury. In this case, we expect that the other party will find satisfaction in having their medical expenses covered. They still have the right to sue for negligence and get benefits. They can choose either an out-of-court settlement or a judgment against you. If you are sued, the claim would be settled under the liability coverage of the commercial general liability insurance. This coverage is different from the medical expenses cover.
Case: Liability cover and Medical Expense cover
K.S Textiles has earned a reputation as one of Surat, Gujarat’s reputed textile companies since 2005. The company has offices spread around India. Last year, the company bagged a huge contract from a foreign company. As per the deal, they had to export goods worth Rs 10 crore textile products and garments. Here, the foreign company insisted on checking the quality of the stock, and therefore, it sent one of its representatives, Mr. Daniel to K.S Textile’s manufacturing unit in Surat.
When Daniel was inspecting the garments, he accidentally tripped over his own two feet and hurt himself.
Read more: What is a Commercial General Liability Insurance?
Here K.S Textiles had commercial general liability insurance, and therefore, the company approached the insurer for compensation. In this case, there was no negligence on the part of K.S Textiles. However, it wanted to help Daniel and therefore, approached the insurer to get compensation under medical expenses cover. The insurer covered medical expenses incurred by Danial during his treatment.
Now, what if Daniel had fallen due to the negligence of K.S Textiles? Let’s discuss this:
Daniel was inspecting the garments when he tripped over an extension cord and hurt his back. As it was the responsibility of K.S Textiles to ensure complete safety at the workplace, therefore, Daniel filed a case against it for compensation. As K.S Textiles had a commercial general liability insurance policy, it approached the insurer for the claim settlement who thoroughly inspected the situation and settled the compensation under liability cover. In this case, the accident happened due to the negligence of K.S Textiles, and therefore, the insurer settled the claim, which included both medical expenses and compensation, under liability cover.
