In today’s age where technological advancements are making our lives easier and social media is providing us a platform to express our opinions, at the same time both technology and increased social awareness is changing the landscape of Liability. Consumers are becoming more aware of their rights and various avenues are opening for consumers to express their experiences as far as various products / services are concerned.
With these businesses are being challenged to ensure high standards of quality in their products and deliverables and are exposed to claims from various consumers and other interested third parties if their products and services are found to be defective thereby causing bodily injury or property damage to others.
Commercial General Liability Insurance policy covers legal costs and expenses incurred in defence of the insured, as well as any damages or costs that may be awarded, if the insured is alleged to have been negligent in the conduct of their business operations including the sales and services of their products which leads to a third-party bodily injury or property damage.
WHO SHOULD BUY
Any business big or small, established or a start-up faces the risk of Third-party liability, either to visitors who come to their premises and might get injured due to slip, trip or fall due to the faulty upkeep of the premises or in other forms to their customers or end users of their products if their products cause bodily injury or property damage to a third party, the former cover is called Premises Liability or Public Liability cover and the latter is more commonly known as Product Liability cover. Commercial General Liability combines both these coverages under one single policy.
Although Public Liability section should be bought by all kinds of businesses its need is more relevant to establishments like – Hotels, Hospitals, Schools, Cinemas, Salons, Gyms, Spas, Restaurants, Resorts, Property developers/Owners – Malls / Supermarkets, Showroom / Shops, Exhibitions, Event management companies or any other sort of non-industrial establishment, Godown/warehouses, factories, industrial establishments, Civil / Electrical / Mechanical Contracting companies and the like. Product Liability section is applicable to manufacturers & retailers of various products which can be either end products or components that form a part of a larger product Eg. Auto components that go into manufacturing of automobiles are a big buyer of product liability / CGL Insurance.
WHO CAN BRING CLAIMS?
W.r.t Public Liability section any third party Eg- visitors at the insured’s premises like vendors, creditors, customers, surveyors, regulatory authorities and practically anyone else who might be injured due the negligence of the insured in carrying out their business operations. W.r.t Product Liability section most often customers or end users of the product who have suffered bodily injury or property damage because of insured’s faulty products.
CLAIM EXAMPLES
A manufacturer of power meat slicers is sued by a third party alleging that the product malfunctioned, resulting in partial amputation of a right thumb and finger. The manufacturer is found liable. CGL Policy would likely respond to the loss.
A tenant in a condominium complex falls down an improperly lit interior stairwell and suffers significant injuries. The property owner is sued for negligence & found liable. CGL Policy would likely respond to the loss.
POLICY FEATURES/ EXTENSIONS
• Product Completed operations hazard (which applies to contracting and engineering companies)
• Personal & Advertising Injury cover
• Medical expenses coverage
• Sudden & Accidental Pollution Liability cover
• Coverage for Additional Insured as per requirement of the contracts
• Vendor’s Endorsement
• Worldwide Territory & Jurisdiction cover
• Non-Owned or hired automobile liability cover
• Terrorism legal liability cover
• Personal property under care, custody, control cover
• Valet parking
• Transportation extension
