A typical commercial general liability insurance offers coverage against claims of bodily injury or property damage for which your company may become liable to pay. A commercial general liability insurance policy comes with comprehensive coverage. In commercial general liability insurance, there are two coverages available— liability cover and medical expenses cover. In case of a liability cover, the coverage for a third-party damage is given, provided the policyholder is legally obligated to pay. In case of medical expenses cover, the insurer offers coverage, regardless of the fact that whether the policyholder is obligated to make payment or not.
While a medical expense cover includes expenses which are related to injury or accident only, a general liability cover includes any types of liability, like advertising injury, property damage, etc.
On the other hand, the medical expenses cover would offer the coverage as soon as the accident or unfortunate event happens at the construction site, irrespective of the fact that whether the insured is obligated to pay the compensation or not. For instance, if any of your customers falls in your retail store and suffers a fracture, the compensation paid for such injury would fall 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. Note, in case injury caused to your employees; it would be covered under worker’s compensation insurance policy.
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. Here the hope is that the other party would be simply satisfied with having their medical bills paid. They still have the right to sue for negligence and get benefits by either going for the out-of-court settlement or by procuring a judgement against you if they wish to. In case, you are sued, the claim would be settled under the liability coverage of the commercial general liability insurance cover, which is different from the medical expenses cover.
Since 2005, K.S Textiles is known as one of the reputed textile companies in Surat, Gujarat. The company has its 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.
Here K.S Textiles had a commercial general liability insurance, and therefore, the company approached the insurer for the 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 on 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 the complete safety at the workplace, therefore, Daniel filed a case against it for the 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.