Imagine you are the owner of a restaurant in a premium location in your city. One weekend amidst the heavy rush, one customer slips on the floor and breaks the ligaments in her hand. In extreme pain and anger, she decides to sue the owner of the restaurant – that’s you. You’re staring at a loss which will run in lakhs of rupees, and now you pray for a savior who can pull you out from this mess.
Commercial General Liability Insurance (CGLI Policy) is the savior you are praying for. Being a businessman, you’re aware of the multiple risks that your business faces. You never know which small incident at your premises or any natural disaster can cost you a bombshell. It is always a good idea to insure you against all possible business risk avoiding any loss in the future. Such risks come under General Liability Insurance.
What is Commercial General Liability Insurance policy in business?
A Commercial General Liability Insurance (CGLI) policy is an insurance policy designed to help you save lakhs of rupees in legal liability arising from third party injury or damage. To simplify, if your routine business activity results in any bodily injury to the client at your premises, you may be required to reimburse for all associated charges and penalty.
CGL Insurance policy can rescue you when your business is found legally liable and responsible for the injury to the third party at your premises.
Here are a few examples or situations in which your business will be liable to pay various costs associated with the incident – medical, legal, penalty and among others:
- During your company visit, the client gets injured due to some machinery
- A lady gets severe skin problems after using your product.
- An activist files a petition in court alleging misleading advertisement.
- A customer gets serious stomach problems after dinner at your restaurant.
Why do you need CGLI policy for your business?
To understand the need for a General Liability Insurance policy, it is important to know some business hazards that can put you on a sticky wicket. Some of the hazards are as follows:
Bodily Injuries / Property Damage
You may be held responsible if any injury to the third person is due to falling, slipping, or electrocution. As any business involves continuous interactions with third party clients, you’re always in the danger zone.
Product Quality Issues
Any claim related to glitches in your product that can physically or mentally harm users,.
Advertising Infringement
Infringement cases for using copyright images, content, and videos are quite common. Even though you may have done it unintentionally, you’re in trouble.
To avoid such business hazards, you need a Commercial General Liability Insurance policy. This CGLI policy will –
- Bear all the medical expenses of the third party on your behalf.
- It may also repair, renovate, or replace damaged material of the third party like a laptop, phone, among others.
- It can bear the entire legal costs of fighting infringement charges leveled against you.
- It can help you in out-of-the-court settlements in case of invasion of privacy.
What are the benefits of Commercial General Liability Insurance policy?
By this time, you’re already clear about what your potential business risks are and how a general liability insurance policy can help you in this. So now let’s look at the possible advantages of owning one such policy.
- You can protect your business from any unpredicted events/incidents which can result in
- Bodily Injury – If the injury is caused to third party visiting your office or plant
- Property Damage – If any damage is done to the third person’s property because of your business activity
- Personal Injury – Any false arrests, wrongful entry, negligence
- Lawsuits, Investigations, and Settlements – In such cases, the insurance company will bear all the expenses of the attorney, investigator, medical expenses, etc.
- This kind of policy gives you flexible payment option facilities as well. You get an option of making monthly payments without any additional charges.
- The policy comes with claim responsiveness. This ensures the action of your insurance provider the moment claim is filed.
- In true sense, it gives you peace of mind and convenience to grow your business and achieve maximum success.
What does CGLI policy cover?
The list of General Liability Insurance coverage includes: –
- Legal liability arising out of incidents involving damage to the third party’s property while visiting your premises.
- Any injury or damage due to accidents because of your products, operations, or advertisement will be taken care off.
- Any Medical expenses arising out of injury to the third party at your premises.
- If your business is sued for any damage to a third party, all legal and related fees will be covered by the insurance provider.
What does Commercial General Liability Insurance policy not cover?
- Business Property Damage – If your office is completely damaged by a sudden outbreak of fire or natural disaster, it won’t be cover under this policy. It might get recovered through a commercial property insurance claim, which is a different policy altogether.
- Professional Errors – If your business is unable to fulfill the commitment of delivery of prescribed goods to a customer who files a lawsuit for his loss, you won’t get coverage under this policy. If you want to cover that liability, you need to take a professional liability policy.
- Employee Injuries – Only third-party injury is covered under a general liability policy. If any of your employees gets injured during routine business operations, it can be covered by a Worker Compensation policy.
How to buy the best Commercial General Liability Insurance policy?
- There are many insurance companies in India which give CGLI Policies. Few of them are –
- TATA AIG General Insurance
- HDFC Ergo Limited
- ICICI Lombard Insurance
- Bajaj Allianz Insurance
- The best way to select an apt insurance policy is to analyze your business needs & potential hazards. Based on the analysis, finalize your insurance needs.
- Compare the benefits of policies from different insurance providers on – Claim settlement ration, coverage offered, premiums, conditions, etc.
Keeping your business needs in mind, select the best General Liability Insurance policy and protect your business from unforeseen risks.