What is Covered Under Commercial General Liability Insurance?
The common inclusions that most of the commercial general liability insurance plans provide to their policyholders are:
| Injury on insured premises |
If a customer or business partner sustains an injury on the company's premises, the company is responsible for related costs. Commercial general liability insurance policy offers financial coverage to address these costs. |
| Injury by a product |
The company is accountable if manufactured products lead to bodily harm to customers. This policy provides financial coverage in such cases. |
| Property damage |
If a company's product or service causes property damage to third parties, a general liability insurance policy covers the related expenses. |
| Advertising error |
Miscommunication leading to customer losses, like inadequate warnings or copyright issues, is covered by commercial general liability insurance. |
| Completed operation |
Certain policies extend coverage even after project completion. For instance, if a completed construction project later causes problems and damages, the policy covers the associated costs. |
| Injury by services |
If a customer sustains bodily injury due to errors or omissions in services rendered by the company, commercial general liability insurance offers financial coverage for related expenses. |
Note: Coverage provided under Commercial General Liability Insurance Policy varies from one insurer to another. Coverage provided by the insurance company depends on the terms and conditions mentioned in the policy wording.
What is not Covered Under Commercial General Liability Insurance?
The following are standard exclusions found in the majority of Commercial General Liability insurance plans:
| Product recall |
Coverage is not extended to expenses related to product recalls, which might arise due to defects or safety concerns. |
| Deliberate non-compliance |
Losses resulting from deliberate, willful, or intentional violations of statutory regulations are not covered under a commercial general liability insurance policy. |
| Cost of reconditioning/repair |
This policy does not include costs for reconditioning or repairing products. |
| Product guarantee claims |
Claims stemming from product guarantees are excluded from coverage. |
| Pure financial loss |
Pure financial Losses, like loss in market share, are not covered under a commercial general liability insurance policy. |
| Damage to the own product |
The policy does not cover damage to the insured's products. |
| Product Manufactured or Domiciled in USA/Canada |
The products manufactured or domiciled in the USA or Canada are not covered. |
Note: Exclusions within commercial general liability insurance policies can differ significantly between insurers. To tailor a plan that meets your business's specific needs, you can connect with our team of experts at Policybazaar for Business. We're here to help you craft a customised insurance solution that offers comprehensive coverage.
Commercial General Liability Insurance: Add-ons
Here are the add-ons that insurance companies provide with a commercial general liability insurance policy (CGL insurance):Â
- Act of God: This coverage protects against damages caused by natural disasters or other uncontrollable events like earthquakes or hurricanes.
- Food & Beverage Liability: This insurance shields businesses from liability claims arising from food-related illnesses or injuries caused by consuming their products, typically vital for restaurants, caterers, or food manufacturers.
- Sudden & Accidental Pollution: This add-on is designed to cover unforeseen pollution events caused by business operations.
- Lift Liability: Lift Liability insurance safeguards businesses operating elevators or lifts from liability claims related to accidents or injuries occurring on their premises due to lift usage.
- Travel of Executives: This coverage extends protection to key personnel during business travel, encompassing medical emergencies, trip cancellations, lost luggage, and other travel-related risks.
- Non-owned or Hired Automobile Liability: Non-owned or Hired Automobile Liability insurance covers liability risks associated with vehicles not owned by the business but used for its purposes, like employee-owned or rented vehicles.
Note: Add-ons provided under commercial general liability insurance coverage vary from insurer to insurer. To learn about the add-ons in detail, you can connect with our team of experts at Policybazaar for Business. We're here to assist you in developing a tailored insurance solution that provides extensive coverage.
Commercial General Liability Insurance Coverage: Claim Process
Here are the steps that you will have to follow to raise a claim under Commercial General Liability Insurance:
- Notify Your Relationship Manager: To effectively kickstart the claim process, promptly inform your dedicated relationship manager about the incident.
- Complete and Submit Claim Forms: Fill out the provided claim forms and submit them to your relationship manager to formally initiate the claim procedure.
- Evaluation and Claim Registration: Your submitted information will be promptly forwarded to the insurance company for thorough evaluation and registration of the claim, resulting in the issuance of a unique claim reference number.
- Appointment of Surveyor: Upon claim initiation, the insurer will appoint a competent surveyor to assess the situation and ascertain the extent of the damages.
- Documentation Submission: Upon survey initiation, the appointed surveyor will guide you through the required documentation process. Submit all necessary documents as instructed for efficient claim processing.
- Claim Approval and Funds Disbursement: Once the evaluation process is complete and your claim is approved, the insurance company will promptly release the claim funds to you for timely resolution of the incident.
Note: The insurer will carefully review the terms and conditions of your policy to determine coverage for the claimed incident. Consequently, the decision to accept or reject the claim will be made at the insurer's discretion.Â
Moreover, any engagement with advocates or legal documents related to the claim requires prior approval from the insurance company.Â
What Details Are Required to Buy a CGL Insurance Policy?
Here are a few things that an insurer would require before selling Commercial General Liability Insurance:
- Size of Business
- Yearly Revenue
- Claim History
- Business Operations
- Previous Insurance Details, if any
Note: These requirements may vary from insurer to insurer while selling the CGL policy.
Documents Required for Comprehensive General Liability Insurance Claim
Below are the essential documents needed to file a claim for Comprehensive General Liability insurance:
- KYC Documents:
- Business Registration:
- GST Registration Certificate
- Incident Location Address Proof:
Note: While these documents form the fundamental requirements, any additional documentation or Letter of Requirement (LOR) will be communicated to your relationship manager by the insurance company. Your relationship manager will assist you in collecting and submitting the necessary documents to the insurer.
Who Gets Covered Under Commercial General Liability Insurance?
Commercial General Liability policy provides coverage for the following:
- Sole Proprietors: Individuals operating businesses on their own, with full responsibility for their business's operations and liabilities.
- Partnerships, Joint Ventures, or Unincorporated Entities: Groups of individuals or entities working together on ventures, sharing responsibilities and potential liabilities.
- Employees: Those working within the organisation are covered for their actions within the scope of their job duties.
- Subsidiaries and Recently Established Entities: Newly formed or acquired organisations that fall under the operational and coverage scope of the parent company.
- Other Organisations: Encompasses a range of entities, excluding partnerships, joint ventures, or unincorporated entities, and includes a diverse array of incorporated organisations.
Examples of Commercial General Liability InsuranceÂ
Here are some examples of scenarios covered under a Commercial General Liability Insurance coverage:
- A customer slips and falls on a wet floor in your store, resulting in medical expenses and potential legal claims.
- While performing maintenance, an employee accidentally damages a client's property, such as breaking a window or spilling paint on furniture.
- A competitor sues your business for alleged defamation in an advertisement.
Why is Commercial General Liability Insurance Coverage Required?
The Problem
In today's competitive business environment, companies are constantly exposed to various risks that could lead to costly legal battles and financial liabilities. The likelihood of lawsuits is substantial, from customer incidents on business premises to accusations of property damage attributable to products or services. Without adequate protection, businesses face the prospect of substantial financial strain and reputational damage arising from legal disputes.
The Solution
To address these challenges and ensure the financial stability of businesses, CGL insurance is essential. This insurance serves as a vital safeguard by providing coverage for legal expenses, settlements, or judgments resulting from lawsuits filed by third parties. It protects businesses against the potential financial devastation caused by liability claims related to bodily injury, property damage, or other legal disputes. Therefore, by investing in CGL policy, businesses can mitigate their risks, protect their assets, and preserve their reputation in the face of adversity.
Who Should Buy a CGL Policy?
CGL Insurance is an essential asset for various businesses, particularly those susceptible to heightened liability risks. Here are some of the businesses that could benefit from investing in Commercial General Liability Insurance:
- Small Businesses: This category includes startups and sole proprietors, who can leverage CGL Insurance to shield themselves against unforeseen liability claims that might otherwise endanger their financial stability.
- Retailers: Physical storefronts face inherent risks such as slip-and-fall accidents or injuries stemming from defective products. This policy offers coverage for these potential incidents.
- Contractors and Construction Companies: Construction entities, including contractors and subcontractors, confront diverse risks on job sites, ranging from property damage to bodily injury. This insurance serves as a means to reduce these risks.
- Service-Based Businesses: Service providers like consulting firms, advertising agencies, or IT companies may encounter claims related to service errors or omissions. This policy provides a safeguard against such claims.
- Manufacturers: Manufacturers face the threat of liability claims due to defects in their products, leading to bodily injury or property damage. Commercial General Liability insurance extends coverage for product liability claims.
- Healthcare Providers: Healthcare professionals and facilities, such as doctors, clinics, and hospitals, recognise the importance of Commercial General Liability insurance for defending against claims of third-party bodily injury within hospital premises.Â
Things to Consider When Purchasing a Commercial General Liability Insurance Policy
When purchasing a Commercial General Liability insurance policy, one crucial decision to make is determining whether you prefer a claims-made or an occurrence policy. To gain a comprehensive understanding of these options and their implications, let's explore the differences between them:
1. Claims-Made Policy
In a claims-made policy, coverage is activated when a claim is filed against the insured during the policy period, regardless of when the incident occurred. This policy type responds to claims made and reported within the policy term, but may have limitations on coverage for claims reported after policy expiration.
2. Occurrence Policy
An occurrence policy provides coverage for incidents that occur within the policy period, regardless of when the claim is filed. Coverage is triggered by the occurrence itself during the policy term, offering long-term protection for claims arising from past events, even after the policy expires.
Why Should You Purchase Commercial General Liability Insurance via Policybazaar for Business?
- Assigned Relationship Manager: From day one, you'll have a dedicated relationship manager by your side, providing personalised support and expert advice to safeguard your business against potential risks.
- 365-Day Claim Support: Our team of claim experts is available throughout the year, ensuring swift and seamless processing of your claims whenever you need assistance.
- Expert Advisory: Our experienced business risk consultants offer tailored guidance to meet your unique needs and preferences, helping you navigate challenges and make informed decisions.
- Competitive Pricing: With access to a wide network of insurer partners, we negotiate competitive quotes from leading insurers, ensuring you get the best rates in the market without compromising on service quality.
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Under a CGL policy, the insured typically includes the named insured (business or individual listed in the policy), employees acting within their job scope, business partners, temporary workers, and additional insureds added by endorsement, such as contractors or landlords. However, policy terms may vary.
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Absolutely, CGL Insurance plans are flexible and can be tailored to cover a specific project. It's important, however, to communicate your specific requirements clearly to prevent misunderstandings.
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No, Comprehensive general liability insurance does not encompass theft or asset protection. Its primary focus is covering damages caused to third parties due to a business's products or services. If you require theft coverage, you should explore options like Commercial Crime Insurance.
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During the renewal of a Comprehensive general liability insurance policy, factors akin to those during the initial purchase are taken into account. However, the premium is adjusted based on current market conditions, inflation rates, the company's claims history, underwriting factors, recent changes in business operations, industry patterns, prior experiences with the insurer, and more.
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Calculating the premium for a Commercial General Liability Insurance policy involves considering various elements. These include business size, coverage requirements, revenue, the company's claims history, geographic scope, risk assessment, deductible level, and additional policies. It's recommended to obtain quotes from multiple insurance companies to secure the most competitive pricing.
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While the premium calculation process varies by insurer, there are effective ways to secure a better cost. Start by comparing quotes from various companies and selecting the most favourable option. Focus on risk management tactics and maintain a claims-free history. Lastly, prioritize transparency and cultivate a lasting partnership with your insurance provider.
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Yes, prior claims from a company are taken into account when determining CGL premiums. However, multiple aspects, including the nature, frequency and timing of the claims, associated losses and public perception, impact the premium's expense. Therefore, maintaining a transparent and positive claims history is recommended for more favourable pricing.
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You can get commercial liability insurance quotes on the Policybazaar for Business website. You can also compare different plans and purchase the one that suits your requirements.
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No, a single policy can cover multiple locations. You can choose a designated location policy that encompasses all specified sites. Alternatively, there's the option of worldwide coverage for global risk protection.
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Certainly, you can tailor a Commercial General Liability Insurance policy for specific projects. Just ask for a customized policy that suits your needs. Typically, these project-specific policies provide coverage throughout the project's duration.
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Commercial General Liability insurance (CGL insurance) provides coverage for a range of liability risks faced by businesses. It typically includes protection against claims of bodily injury, property damage, personal and advertising injury, and legal defense costs arising from business operations, products, or premises.
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The full form of CGL in insurance is Commercial General Liability Insurance
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A Commercial General Liability Insurance policy for an IT company offers protection against liability claims arising from the company's business operations. This may include claims related to bodily injury, property damage, personal and advertising injury, and legal defense costs.
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Commercial General Liability occurrence refers to an event or incident that triggers coverage under a CGL insurance policy. In occurrence-based policies, coverage is provided for claims arising from incidents that occur during the policy period, regardless of when the claim is reported. This means that as long as the incident occurred while the policy was in effect, it is covered, even if the claim is made after the policy has expired.
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Under a CGL policy, the insured typically includes the named insured (business or individual listed in the policy), employees acting within their job scope, business partners, temporary workers, and additional insureds added by endorsement, such as contractors or landlords. However, policy terms may vary.
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Commercial General Liability insurance exclusions are as follows:
- Product Guarantee
- Repair and Replacement Cost
- Errors and Omissions
- Fraud and Dishonesty
- Product Inefficacy
- Product manufactured or domiciled in USA/ Canada
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