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Ahmedabad
Thursday, May 30, 2024

COMMERCIAL GENERAL LIABILITY INSURANCE


 

What is a CGL Policy?

  • This is a complete policy to provide seamless protection to the Insured, and covers Third Party Liabilities arising from various business exposures such as those arising from Premises, Products, and completed operations, Advertising and Personal injury and also provides supplemental payments, thus ensuring complete protection to the insured against Liability issues. 
  • Commercial Liability includes the liability of the companies towards the public as well as the employees at large. Covers Public in the company premises as well as the Product in the customers premises. Liability arising in any case aforesaid are covered under this insurance.
  • Basically liability Insurance triggers when a suit is filed against the insured. 

Key Policy Features :

  • The policy can be obtained on either “Claims Made Basis” or Occurrence Based
  • Where a policy is written on a “claims-made” basis, it means that the policy in force at the time where a claim against the company is made will pay for losses, regardless of when they occurred in the past. (Assuming no retroactive inception date restriction).
  • With an “occurrence” based policy, even though the policy may have expired, provided the policy was in force at the time of the bodily injury or property damage occurred, a claim can still be made against it.
  • Provides Comprehensive Coverage 
  • Provides Worldwide Coverage
  • Advantage of Refund Clause
  • Vendor’s Interest can be added to the policy.

Who is Indemnified?

  • Insured Company
  • At the request of the Insured, any party who enters into an agreement with the Insured for any purpose of the Business.
  • Officials of the Insured in their business capacity or private capacity.
  • Any person who at any time is, has been or may become during the period of the policy period a partner or director. 
  • Any person who is or has been employed under a contract of service including Self Employed Persons. 
  • The estates and/or the legal representatives in the event of the death or incapacity of the Assured or of any of the persons defined in (1) and (2) above. 

Who can take this policy?

  • Indian Companies that have global operations.
  • Foreign companies who have opted for the CGL policy in other jurisdictions and would prefer the same for their Indian operations.
  • Companies who are contractually bound to carry Occurrence based liability covers.
  • Export companies who would prefer Claims handling abilities in all major jurisdictions. 

Coverages

  • The policy covers are divided in three sections.

Coverage A, B & C.

The coverage’s are discussed in the following

slides.

Coverage A : Bodily Injury & Property Damage Liability

  • Under this section the company will indemnify the insured against those sums that he’ll become legally liable to pay as damages because of bodily injury or property damage to a third party. 
  • The insurance will apply to bodily injury or property damage only when the bodily injury or property damage is caused by an occurrence that takes place in the coverage territory within the policy period. 
  • In countries where the law of the territory don’t permit the insurance company to defend, the insurance company will re-imburse the insured for the defense costs, subject to insurance company’s  prior authorization in writing.

Exclusions of Coverage A

  • Expected or intended injury
  • Contractual Liability
  •  Liquor Liability
  • Workmen’s Compensation
  • Employer’s Liability
  • Pollution
  • Aircraft, Auto or Watercraft
  • Mobile Equipment
  • War
  • Damage to Insured’s Property
  • Damage to Insured’s Products
  • Damage to Impaired Property or Property not physically injured
  • Recall of Products, Works or Impaired property
  • Employment Related Practices
  • Personal or Advertising Injury
  • Asbestos & Nuclear Reactions

Coverage B: Personal & Advertising Injury:

  • In this cover the company will indemnify the insured against those sums that he’ll become legally liable to pay as damages because of Personal & Advertising Injury to which the insurance applies. 
  • The insurance applies to personal and advertising injury caused by an offense arising out of your business, but only if the offense was committed within the coverage territory within the policy period.

Exclusions of Coverage B

  • Caused by or at the direction of the insured.
  • Arising out of oral or written publication of material if done at the direction of the insured with the knowledge of its falsity.
  • Arising out of oral or written publication of material whose first publication took place before the policy inception.
  • Arising out of criminal act committed by or at the direction of the insured.
  • For which the insured has assumed liability under a contract or agreement./Arising out of breach of contract.
  • Arising out of failure of goods, products or service to conform with any statement of quality or performance made in the insured’s advertisement.
  • Arising out of wrong description of the price of goods, products or service stated in the insured’s advertisement.
  • Arising due to pollutants./Arising due to war or related activities.

Coverage C Medical Expenses:

  • The company will pay for the medical expenses as
  • caused by an accident:
  • At the insured’s premises
  • On ways next to the premises owned by the insured
  • Because of insured’s operations.
  • If the accident is reported to the insurance company within 30 days of the date of accident.
  • Reasonable expenses would be paid for:
  • First aid administered at the time of an accident.
  • Necessary medical, surgery, X-Ray, and dental services including prosthetic devices.
  • Necessary ambulance, hospital, professional nursing and funeral expenses.

SUPPLEMENTARY PAYMENTS: COVERAGES A & B

  • There are various supplementary payments over & above the costs mentioned above that are made to the insured by the Insurance Company.
  • It depends on the insurance companies polices.

Limits of Insurance

  • The Limits of Insurance in CGL  will be paid 

regardless of the number of:

  • a. Insured
  • b. Claims made or suits brought; or
  • c.    Persons or organizations making claims or bringing suits.

Protection under the Policy ?

  • Legal costs in defending allegations or suits brought against the insured entity / Employees
  • Any awards granted to the claimants
  • Legal costs / awards arising out of the activities of Specialist Consultants, Sub-Contractors or any other person(s) or entity acting on the Assureds behalf and for whom the Assured are responsible. Provided always that underwriters shall become subrogated to all rights of recourse of the Assured

For any insurance solutions, please contact Beacon Insurance at https://www.beacon.co.in/ 

Insurance is a subject matter of solicitation


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