A Commercial General Liability insurance policy is one of the most important policies to be considered for all businesses. There are potential threats of an accident to a customer, ven-dor, or any third-party involved with your business. Even a simple slip and fall in the premises can be devastating resulting in a potential lawsuit.
The Commercial General Liability Insurance policy will provide necessary financial support to businesses against any legal liabilities due to a bodily injury or property damage that can oc-cur as a result of your business operations.

Coverage

Commercial General Liability insurance is a combination policy covering both public and product liabilities under one single policy form.
  • Covers for legal liability to pay damages because of bodily injury or property damages with no limitations for cover in terms of premises- owned/rented or at premises/out-of premises.
  • Coverage includes all bodily injury and property damage arising out of products of the busi-nesses. Product Liability Insurance will cover for cost of compensation against financial losses suffered by a third-party arising out of use or consumption of a faulty product. The third-party has to suffer a bodily injury or property damage.
  • Any damages because of personal and advertising injury caused by an offence arising out of business.

Critical Features of the CGL policy

Third-Party Injury Protection May Cover

  • Non-employee injuries that happen on your property.
  • Immediate medical expenses for the injured person.
  • Legal costs when you're sued over the incident.
  • Lawyers' fees.
  • Court expenses.
  • Settlements, and Judgments, if the case goes to trial and you're found liable for wrong-doing.

Third-Party Injury Protection May Cover

  • Repair costs for damaged property.
  • Replacements for lost or destroyed property.

Product Liability Protection May Cover

  • Damage caused by the products you make, distribute, or sell.
  • Legal costs when you're sued over the incident.

Advertising Injury Protection May Cover

  • Invasion of privacy, such as using someone's image or words without their consent.
  • Libel or slander.
  • Copyright or trademark infringement.
  • Legal costs when you're sued over these incidents.
Definitions:
  • Bodily injury – Includes death and illness, disability, shock, anguish or mental injury.
  • Property damage – Any destruction of tangible product including loss of use.

Who can buy the Commercial General Liability insurance?

  • Small businesses
  • Contractor
  • Manufacturers.
  • Distributors
  • Wholesalers and retailers.

The product that is insured can be the final product or just a part of the final product. Hence, all businesses involved in either manufacturing or distribution of a tangible product should consider buying this insurance policy.

What is paid under Commercial General Liability insurance?

Commercial General Liability insurance provides cover for payments, medical expenses and damages including:

  • Legal liability expenses including claimant’s costs, fees and Defense costs.
  • Damage costs – monetary sums pursuant to judgments or awards and settlements.

All the above expenses and costs are paid for third-party claims arising out of bodily injury or property damage.

What is NOT Paid under this insurance?

  • Any liability for fines, penalties or punitive damages.
  • Product Guarantee.
  • Recall of any product (unless purchased as an extension).
  • Repair or modification or replacement of product or any part of the product.
  • Wilful, deliberate non-compliance with any statutory provisions.
  • Copyrights, patents or trademarks infringement.
  • Radioactive toxic explosives or other hazardous materials.
  • Claim made prior to policy inception or retroactive date (if any).
  • War risk and Terrorism.

How the limits under Commercial General Liability insurance work?

  • Coverage will be restricted by policy terms and conditions, and limited within a certain maximum limit of coverage per event or occurrence (AOA)
  • The limit varies depending on the company’s revenues, business, and exposure type.
  • The policy limit is an “annual aggregate” (AOY) meaning that there is only one single limit for all the claims during one policy year.
  • Defense and other costs are part of this single limit