Commercial General Liability (CGL) insurance - Full Form, Meaning, Cost and Coverage

Commercial General Liability (CGL) Insurance protects businesses against liabilities requiring them to pay compensation for third party damages and injuries due to their routine business activities. Check out the cost of CGL Insurance, claims and renewal process.

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An Introduction to Commercial General Liability insurance

What is CGL Insurance in India?

CGL Insurance protects businesses against liabilities requiring them to pay compensation for third party damages and injuries due to their routine business activities. The policy safeguards organization against both public liability and product liability claims.

It is highly recommended for businesses with physical premises, contractual requirements with clients and those who interact closely with third parties

Understanding Commercial General Liability (CGL) Insurance

Commercial General Liability (CGL) Insurance covers both Public Liability and Product Liability relating to third parties. Public Liability covers any third party injury/ damage occurring at the insured’s premises.

Product Liability protects against damages arising from a manufactured product.

CGL insurance offers various levels of coverage. These policies often include premises coverage, which safeguards businesses against claims arising from incidents that occur at their physical location during regular operations.

They may also provide coverage for bodily injury and property damage resulting from products or services rendered at off-site locations.Insurance providers also offer excess liability coverage for large entities, which can be purchased to protect businesses in the event of claims that exceed the limits of their CGL policy.

Certain commercial general liability policies may have exclusions that limit the actions covered.

Why Should You Buy CGL Insurance?

It is essential for your business to be covered by CGL Insurance if you’re in any of these situations;

  1. A business with physical premises where there is frequent third party presence

  2. A business where employees are visiting third party premises

  3. A contractual requirement by vendors/ customers to purchase CGLIt aids in complying with various legal statutes.

It is also common practice for clients to request that businesses carry CGL insurance coverage prior to establishing a business partnership. Many clients impose the condition of adequate insurance coverage on their suppliers or partners in order to protect themselves against potential liabilities stemming from the business relationship.

Furthermore, clients may require businesses to include them as additional insured parties on the CGL policy. This ensures that the client is afforded coverage under the policy for any liabilities arising from the business operations.

By mandating CGL insurance, clients can mitigate their own risk exposure and safeguard themselves against potential financial losses.

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What's covered and what's not

CGL Insurance - What is Covered?

CGL Insurance covers claims relating to the following categories;

  1. Bodily injury

    In the event that an individual sustains injuries either on your business premises or due to your products or services, CGL insurance can provide coverage for medical expenses, legal fees, and other associated costs.

  2. Property damage

    If your business causes damage to someone else's property, CGL insurance can assist in covering the expenses for repairing or replacing the affected property.

  3. Personal and advertising injury

    If your business faces allegations of defamation, libel, copyright infringement, or similar claims, CGL insurance can help cover the legal costs and other related expenses.

CGL Insurance - What’s not covered?

CGL Insurance does not cover claims relating to the following categories;

  • Breach of Contract

  • Criminal Acts

  • Contractual Liability

  • Electronic Data/Electronic Chatrooms Or Bulletin Boards

  • Professional Liability

  • Alcoholic Beverage Liability

Example of Commercial General Liability(CGL)

Below are a few examples of scenarios where your business may be held responsible for various expenses, like medical/ legal costs, compensatory damages, and punitive damages:

  1. A potential client sustains an injury due to a slip on unstable flooring at your premises.

  2. An employee visiting a customer's business premises accidentally leaves the water running, resulting in significant property damage.

  3. Your company faces a lawsuit alleging the defamation of a competitor’s product through your advertisements.

General Liability Insurance claim process

Following are the steps to file a CGL insurance claim;

  1. Initiate contact on priority with the Plum team to report the incident.

  2. Plum works promptly with the insurer partner and subsequent course of action is determined.

  3. In collaboration with Plum and the insurers, an investigator is designated to assess the severity and analyse the details of the incident.

  4. Expert guidance on containment measures to prevent the situation from worsening further is provided.

  5. The Plum team aids you in comprehending the necessary documentation, which includes records on the extent of the impact, the actions taken for remediation, and any direct expenses incurred during the claims procedure.

  6. Following an in-depth analysis of the documentation, the survey report is created.

  7. Plum maintains a strong liaison with the insurer and policyholder throughout the claim approval process.

Documents Required for CGL Insurance Claims

Each claim situation is unique to the business and the incident.Following are the typically required documents when it comes to filing a general liability claim;

  1. Claim form

  2. Document with an explanation of the type of claim, extent of loss, location of the loss, etc

  3. Medical certificates in the event of bodily injury/ illness or death

  4. Other relevant proof or documents required by the insurer

How Much Does Commercial General Liability Insurance Cost?

The pricing of CGL insurance is influenced by various factors, such as the nature and scale of your business, the geographical location, and the desired coverage level.

Plum understands the intricacies of CGL Insurance costs and business vulnerabilities. In order to simplify and make the process transparent, we have developed the Plum Business Policy Engine.

Our engine offers you valuable insights into policies suitable for businesses similar to yours, along with estimated expenses.

Why Plum?

  1. Expert advisors

    The Plum team is adept with experts in the field of insurance. Having deep dived in the insurance industry for years now across various industries, helping SMEs and large enterprises alike, we have the right expertise to consult for your business . This experience helps us build expertise. The team will be by your side right from curating plans for your business to policy purchase and claims settlement

  2. Cost competitiveness

    We leverage our strong insurer relationship and bring evolving knowledge of claims trends, reinsurer market and price fluctuations to the table. This allows us to present competitive and comprehensive plans in the market, tailored to your business.

  3. Smooth claims settlement

    Claims are complex in nature and the repercussions of these claims may sometimes take days/months to recover from, if not years. Plum helps you navigate such long-drawn claims processes with ease by liaising our deep partnership with insurers, legal counsel, and our team of experts.

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Is CGL insurance mandatory for businesses in India?

No, CGL insurance is not mandatory in India. However, many businesses opt for it to protect themselves from potential liability risks.

What types of claims does CGL insurance typically cover?

CGL insurance typically covers claims arising from accidents, injuries, property damage, product liability, and certain advertising and personal injury claims.

What are the limits of coverage provided by a CGL policy?

The coverage limits of a CGL policy depend on the policy itself and the needs of the business. It is important to choose appropriate coverage limits based on the potential risks associated with the business

Does CGL insurance cover legal defense costs in addition to settlement amounts?

Yes, CGL insurance generally covers legal defense costs, including hiring a lawyer and related expenses, in addition to any settlement or judgment amounts.

Can CGL insurance be customized to suit the specific needs of a business?

Yes, CGL insurance policies can often be customized to meet the unique requirements of a business, such as specific coverage enhancements or higher limits of liability.

Are there any exclusions or limitations in a CGL policy that businesses should be aware of?

Yes, CGL policies typically have exclusions or limitations. Common exclusions include intentional acts, professional services, and certain types of property damage. It is important to review the policy terms and conditions to understand the specific exclusions and limitations.

Does CGL insurance provide coverage for product liability claims?

Yes, CGL insurance ocovers product liability claims if they result in bodily injury or property damage.

How can a business determine the appropriate level of CGL coverage needed?

To determine the appropriate level of CGL coverage, a business should assess its specific risks, industry standards, contractual requirements, and potential financial exposure.
Speak with a Plum insurance expert here to ensure adequate coverage is obtained for your business.

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