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What is Commercial General Liability (CGL)?

 Commercial General Liability Policy covers liability like personal injury, bodily injury and property damage that occur on the business premises arising out of business operations or products.


CGL operates as a combination of Public Liability and Product Liability Policy and offers various supplementary covers. Commercial general liability is comprehensive insurance though it does not cover all the risks of a business.


What is the coverage?


Public Liability & Product Liability

Public Liability Covers: Premises related liability  or general liability 

Any claim for legal liability arising due to an accident causing bodily injury and property damage to third parties arising from  manufacturing operations,  pollution etc.

           

Details of Cover:

      Coverage A – Bodily Injury & Property damage    

      Coverage B – Personal & Advertising injury

      Coverage C – Medical Expenses

      Coverage D – Fire Damage to rented premises

      Coverage E – Product Recall


What are injuries under the CGL Policy?


Injuries are various in nature, physical, mental, emotional or social. While we understand what  is a physical injury  it is difficult to comprehend what is a mental, emotional, social injury.

These injuries cannot be translated into a financial loss, yet they remain. A person on whom mental, emotional injury has been inflicted is the best judge to evaluate the extent of loss.


Two types of injuries are covered under the CGL policy personal  & advertising injury. Separate sub limits are opted for each such contingency at the inception of policy itself.



Personal injury is the  harm inflicted on one person due to the other person’s negligence or  misconduct. Damages due to personal injury may be claimed and are payable. Law provides that the injured in such cases can  claim compensation for the fall of their finances and goodwill due to the consequences of the personal injury.

Personal Injury implies Injuries arising out of offenses other than advertising. These include:

  • Invasion of right to privacy

  • Libel, slander

  • False arrests, detention or imprisonment

  • Malicious prosecution

Defense costs and damages are paid as a claim.

Advertising injury coverage under the CGL policy offers cover to  a business from claims of offenses committed in the course of advertising its goods, products or services. Any content that affects the business of competitors, while promotions, advertising or sales, is an advertising injury. Financial loss, negative growth in the business of the competitor are the after effects of such advertising.

What does the policy pay for this claim?

Advertising injury liability  of the CGL insurance policy pays 

  • Defense costs incurred in engaging an advocate to defend the case and the court fees. Claim payable up to the sub limit opted for this cover. 

  • Damages or the compensation for the wrong or hurt inflicted by the other party. Calculation of this depends on the financial standing of the aggrieved, extent of loss etc.


These costs must accrue in the course of  advertising of products or services.

If a company called X  issues an advertisement  which leads to the  rival company losing customers and revenue loss there is a claim under the advertising injury section of the policy. Also the below mentioned factors can lead to a claim  under advertising injury.

  • Violation of copyright  in the process of advertising

  • Plagiarism in the  insured’s advertisements

  • Using someone’s creative work in one’s own advertising without authorization


Extensions under CGL policy

Medical expenses cover: The policy extends to cover any liability arising out of medical facilities extended to any third party by the insured. Medical services and the expenses rendered that are necessary as general liability of the insured.


Valet parking liability extension: The policy is extended to cover any bodily injury or property damage to third party when the vehicle is given to a Valet of the Insured for the purpose of parking.

The insured is responsible for the safe parking of the visitors' vehicles and when any liability arises as a result of negligent parking or maneuvering the insurance policy pays on behalf of the insured.


Commercial general liability is recommended for establishments to protect the insured from third party liability. It is a comprehensive policy due its geographical spread and extensive add-ons when compared to a public liability policy.


We at Zen insurance assist in choosing the right Insurance cover to suit your needs. Please contact us  for  assistance.


 Disclaimer:    

 Zen Insurance Brokers is an IRDAI registered broker which facilitates quick & accurate insurance broking services. We deal with only regulator approved products of insurers. We do not underwrite the  products.

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