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Understanding Duty to Defend and Right to Defend in Liability Insurance in India

In a liability insurance policy, the insurance company has the duty and also the right to defend the insured. The cost involved in defending the insured does not affect the policy limits provided the policy does not state otherwise. This rule is useful because in many cases the defense costs are high when a judicial trail is involved. In some cases, the defense costs can be higher than the claim amount making the defense part of the policy more valuable. Defense costs can be higher than the claim amount particularly in nuisance cases. These are situations where a case is made against the insured party even though the liability is low. The coverage of a claim under a liability policy can vary based on the duty to defend or right to defend clause. Before buying a liability policy, one should know the difference between duty to defend and right to defend and the obligations of the insurer under each wording. Duty to defend Under the duty to defend provision in a liability in...

AOG (Act of God) Perils Extension in CGLpolicies

A OG (Act of God) Perils Extension in Commercial General Liability (CGL) policies refers to the inclusion of natural and unpredictable events under the coverage of the policy. AOG perils are events beyond human control, often caused by natural forces, and their inclusion can significantly broaden the scope of a standard CGL policy. These perils are not covered automatically in a CGL but have to be purchased separately as an add-on. Let us look at this aspect of CGL policies in more detail. Indian firms looking to buy a CGL policy should ideally opt for an AOG perils extension because the country is geographically prone to various natural disasters such as earthquakes, cyclones, and floods. Including AOG perils in a CGL policy will help businesses in disaster -prone areas to protect against liabilities arising from damage or injury caused during such events. AOG Perils covered in a CGL policy Earthquake Floods (including inundation, cloudburst, etc.)...

Can you lock the premium in your health insurance policy?

Getting a health insurance policy has become necessary in today’s time of increasing medical costs. With a health insurance policy, one can access quality medical care without burning a hole in one’s pocket. But, not everyone is keen to buy a health insurance policy. This is influenced by the view that you do not require health insurance coverage if you are young or healthy or both. In India, 400 million people have no health insurance, which is about 30 percent of the population. There can be a multitude of reasons for not having health insurance coverage, affordability, lack of awareness, complex nature of health insurance policies, limited coverage in policies, absence of tailor-made products, or negative experiences with health insurance companies. A significant factor that discourages individuals from buying health insurance is that the premium amount of the policy increases yearly. The proportional increase in the premium amount with every annual renewal is a majo...

Fire damage cover in a CGL policy

In India, Commercial General Liability (CGL) insurance policies provide coverage for liability arising out of bodily injury, property damage, and other associated risks due to the insured's business operations. While fire damage is not directly the primary focus of a CGL policy, it can be covered in specific circumstances under the property damage liability section. A CGL policy typically covers third-party property damage caused by fire. However, it is important to note that the coverage applies only to liabilities arising from fire incidents that affect third parties. Damage to the insured's own property or premises is not covered under CGL and requires separate property insurance. Here are more details on the in a CGL policy: Third-Party Property Damage If a fire occurs on the insured premises and damages third-party property , the CGL policy typically provides coverage for the resulting legal liability. For example: A fire originating in a factory damages a ne...

Medical Expenses Cover under CGL Policies

A Commercial General Liability (CGL) policy grants insurance for third-party liabilities arising from bodily injury and property damage. The Medical Expenses coverage is one of the specific parts of the overall bodily injury liability coverage section under CGL policy. Let us look at how the Medical Expenses coverage usually applies in a CGL policy. Medical Expenses Coverage Purpose: The medical expenses coverage under a CGL policy is intended to pay for all resultant medical costs arising out of accidental bodily injury to third parties who are not employees arising on the insured business' premises or as a result of the operations of the insured company. Scope: It pays for reasonable medical costs, including, · Ambulance charges · Hospitalization expenses · Surgery costs · Consultations with medical practitioners ...

Prior and Pending Litigation in Professional Indemnity Policy

The prior and pending litigation exclusion in liability policies is a clause designed to exclude coverage for claims related to legal disputes or circumstances already known, pending, or in progress before the policy's effective date. It’s an important exclusion because it limits the insurer’s liability for events that occurred before the policy began. Here are more details about this exclusion. Purpose of the Prior and Pending Litigation Exclusion Insurers include this exclusion to avoid covering claims or disputes that were known or existed before the policy started. It ensures that the underlying policy , Directors & Officers (DnO), Professional Indemnity (PI) policy, etc., only covers new claims that arise from professional errors, omissions, or negligence occurring during the policy period and not pre-existing or ongoing legal matters. What the Exclusion Covers Prior Litigation : Any lawsuit, claim, investigation, or l...