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Commercial General Liability Insurance

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Features

  • Financial protection for loss or damage to goods in transit
  • Integrated cover for public, product and completed operations liabilities
  • Useful for meeting contractual requirements

Introducing Commercial General Liability Insurance

This document is meant to provide a brief overview of the product. Please contact is for details of coverage and to assess how it may apply to your business.

What is the need for a Commercial General Liability Insurance?

A business entity faces several risks in its day to day operations. With its varied operations and activities an organization might unwittingly and unknowingly cause damages to a third party for which it might be financially liable. Such financial liability might incur huge expenses for the organization thus hampering its profitability and goodwill. An insurance policy is needed to protect the business entity against such financial risks and the answer is a Commercial General Liability Insurance Policy.

Commercial General Liability (CGL) insurancein Indiacovers an organization against risks and liabilities faced for causing any third party damage or injury.

Coverage

A Commercial General Liability Insurance policy covers the business against the following risks of insurance claims:

  • Bodily Injury – if any third party is physically harmed because of the company’s fault, such bodily injury is covered under a CGL policy. For instance, if a customer falls down in a retail outlet and fractures his/her leg, the business might be held responsible for the injury suffered.
  • Property Damage – any damage caused to a third party’s property by the company. For instance, if the company’s operations cause a damage to any person’s property.
  • Advertising Injuries – any copyright or trademark infringement or any other injury caused due to the company’s advertisement.
  • Personal Injury – harassment or discrimination against a person.
  • Product Liability – damages caused due to product manufactured by the company.

The policy covers the defense costs associated with the above damages, cost of bail bonds, settlements or penalties paid, bond costs to release attachments and interests on full judgement.

Importance of a CGL policy

A Commercial General Liability policy helps the business entity in a number of ways which are discussed below:

  • The policy helps in protecting the entity against sudden and unexpected financial expenses arising out of any of the covered liabilities. Thus, it ensures profitability of the organization.
  • The policy also helps the business meet its Corporate Social Responsibility.
  • The reputation and goodwill of the business is also protected as the policy promptly pays for any injuries caused by the business which earns it credibility.
  • By preventing any unexpected financial losses, a Commercial General Liability policy also keeps the business solvent in difficult financial environments too.
  • Read more - Need of a Commercial General Liability Insurance

Paybima has a wide variety of Commercial General Liability Insurance plans offered by different insurers. You can find a relevant policy along with the Commercial General Liability insurance quote on Paybima. Given its importance, every business organization must have CGL coverage and if you are looking for a good policy you can visit Paybima and find one easily.



Clarify all doubts related Commercial General Liability

What is commercial general liability?

Commercial general liability for any business is a financial loss that may arise due to personal injury and property damage caused by business operations and products. It also includes injury that occurs on the business premises. Commercial general liability insurance policy provides a comprehensive cover to business organizations against such financial losses that arises out of third party claims for bodily injury, property damage and advertising injury. CGL policy comes in different layers to provide an extensive coverage for each type of losses.

How important is commercial general liability for a construction business?

Construction professional and contractors are involved in more risky job. Many of the construction businesses involves client visit for project locations. In such cases, construction businesses should ensure to avail adequate commercial general liability insurance to pay for third party in case of any property damage or personal injury. Construction being the risky business involves complicated machineries and equipment for the construction of building and flyover etc. Any third person getting injured due to negligence on company’s part can file a lawsuit against company asking for compensation. Hence, its sensible for any company related to construction business to avail adequate coverage under commercial general liability policy.

What comes under bodily injury?

Bodily injury refers to humiliation, mental injury, mental anguish or mental shock at suffered by a person any time which has resulted due to a physical injury, disease or sickness. Commercial general liability policy protects business against claims made by third party for such bodily injury. For example, let’s say an employee of interior designer firm was installing a wardrobe at client’s place. His installation collapses which result in serious bodily injury to client present over there. An injured party can file for a compensation from interior designer firm for the bodily injury suffered by him.

Will a CGL policy help me in preparing a defence in case of a lawsuit?

Yes. Commercial general liability insurance will have a policy provision called ‘duty to defend’ which is broader than its duty to indemnify insured. Under duty to defend provision, insurer must provide a defence to insured during claims against him in the lawsuit. Insurer is obliged to pay for defence of all the claims, even if the ones that are otherwise excluded. Cost of defence are unlimited. In simple term, in duty to defend provision, insurer promises to hire legal counsel to defend the insured against a lawsuit along with a promise cover all the defence costs and legal fees.

Does mental trauma and anguish come under bodily injury?

Yes. Mental trauma and anguish come under bodily injury. Commercial general liability policy covers mental injuries, mental anguish or humiliation only if they result from a physical bodily injury.

What does a standard CGL cover include?

Commercial general liability insurance provides different types of coverage which includes-

  • Bodily injury and property damage: Under this, CGL policy gives a protection against legal liability of businesses that may result in due to bodily injury or property damage caused to third party due to non-professional or negligent act in business operation. Injuries that are suffered by third party out of the business premises are also included. Mental injuries, mental anguish or humiliation resulting due to physical injury are also covered under the CGL policy.
  • Personal and advertising injury: Under this, CGL policy covers liabilities that may arise due to certain offenses such as slander, false arrest, libel, malicious prosecution, stealing advertising ideas and infringing others copyright etc.
  • Medical payments: medical payments or expenses can be triggered without even a legal action. Policy provides coverage for medical expenses to treat the injury sustained by a non-employee on the work premise.

Are the policy wordings for a CGL policy applicable worldwide?

Commercial general liability insurance will have a coverage territory provision which defines the applicability about policy wordings for a CGL policy. Most of the CGL policies provide worldwide coverage including international waters or airspace. But most of it excludes The United States of America (including its geographical territories and possessions), Puerto Rico and Canada. Occurrence based CGL policies also exclude the countries against which The Office of Foreign Assets Control of the U.S Department of the Treasury enforces and administers economic and trade sanctions in effect at the time of an occurrence of injury or damage.

What does 'duty to defend' mean?

Under Commercial general liability insurance, policy obligates insurance company to defend the insured against any suit demanding damages due to bodily injury, property damage or personal or advertising injury. ‘Duty to defend’ an insured may be applicable even where the coverage is in doubt. Insurer will have no duty to defend only in case the damage or injury is clearly not covered by commercial general liability policy.

What does the term 'reimbursement' imply?

Generally, reimbursement is repaying the losses or costs incurred. In case of commercial general liability insurance, insurer has a right of getting ‘reimbursement’ for defending insured’s uncovered claims. Insurer may seek reimbursement from insured of all the defence costs incurred for the claims that are not potentially covered under the policy.

How is a product defined under CGL policy?

A business or a company can be sued by third party for injuries caused due to a product that the company makes and sells or even by the completed work. Commercial general liability policy provides a coverage for any claim arising out of injuries due to products or completed work of a business. However, policy does not extend any cover for claims based on damage to your product or a part of your product. Similarly, policy does not provide coverage against claims for property damage to company’s completed work.

Can a company offering CGL insurance issue a Certificate of Insurance? Is it accepted internationally?

Yes. Insurance company offering commercial general liability insurance can issue a certificate of insurance in a globally accepted format.
Certificate of insurance is a one pager that contains the policy details such as types and limits of coverage, policy number, policy’s effective date, insured’s details and insurer details etc. This may require for business to obtain a contract in which potential client wants to be sure about company’s business insurance coverage.

What format does a commercial general insurance follow - occurrence or claim?

Commercial general insurance policy follows both occurrence and claims-made format.
Occurrence CGL policies cover the claims that arise from injury or damage occurring while the insurance policy is in force, irrespective of when the claim is made.
Claims-made policies provides protection against claims that arises from injury or damages occurred and reported during the policy period. Unless the special coverage is purchased, any claim reported to the insurer outside the policy period are not covered.

What are the extensions offers under CGL?

Some of the common extensions offered under commercial general liability insurance are-

  • Damage to rented premises
  • Sudden and accidental pollution liability
  • Vendor’s endorsement
  • Advertising injury and personal injury liability coverage
  • Written and oral contractual liability: property damage/bodily injury
  • Medical expenses coverage
  • Coverage for additional insured

What does vendors endorsement mean?

Seeking extension in commercial general liability insurance with coverage for additional insured-vendors is commonly known as vendors endorsement. Basically, vendor’s endorsement in the commercial general liability insurance policy provides product liability cover to vendors who distribute or sell the insured company’s product. Usually, manufacturing firms require to go for vendors endorsement to insure their product seller against a liability. Vendors endorsement coverage basically protects the seller of the product against any claims arising out of injuries caused to third party by the manufacturer’s product.

Who are the technical collaborators?

Technical collaborators are the one who supplies processes and technical support to the business with whom an insured company or business setup will have an agreement called technical collaboration agreement. Commercial general liability policy gives an extension to cover the collaborators liability in case of any occurrence of accidents which is caused due to defect in designs or processes supplied by the technical collaborators.

What is a batch clause?

Batch clause is a policy provision under commercial general liability insurance specifically for product liability cover. This particular cover is against the liability that arises out of defective products from a specific production batch. Commercial general liability insurance policies may have a batch clause that limits its coverage to liability arising out of defective products in a particular production cycle or batch.

What is expected or intended injury?

Any bodily injury or property damage caused due to organizations business operation, products, premises, completed operations or advertising and personal injury for which claim was placed was done with an intention to cause the harm then it’s considered as expected or intended injury from insured’s standpoint. Such expected or intended injuries are excluded from most of the commercial general liability insurance policy coverages.

What does contractual liability mean?

An agreement where in one party assumes or takes on the liability of the other party via contract is called as contractual liability. Normally, contractual liability cover is automatically included in commercial general insurance policies. For example, a property owner or a builder hires a building contractor firm to complete the work. In this case, builder is aware that someone could get injured or someone’s property may get damaged if the contractor makes any mistake while working. Compensation can be claimed from either a contractor or builder. Here, as per contractual liability agreement contractor will pay for claims even if it’s made against the builder.

What does sudden and accidental pollution mean?

Most of the commercial general liability insurance policies cover excludes the bodily injury or property damage that arise due to dispersal, discharge release or escape of smoke, soot, vapour, acids, fumes, toxic chemicals. Liquid or gases and waste materials or pollutants into or upon the land, the atmosphere, or any other water course or body of water. But if the pollution is sudden and accidental exclusion is not applicable. Sudden and accidental refers to for temporary or short period.

What is the importance of a Commercial General Liability Insurance?

Commercial general liability insurance is vital for any business as it provides comprehensive coverage against the liability claims and protects company’s assets. CGL pays for defence cost, attorney fees in case of lawsuits and also provides coverage against claims of slander, libel and false advertising. It provides below essential covers for the business-

  • Bodily injury or property damage arising out of business operations, product, completed operations, premise, advertising and personal injury
  • Product liability cover which results in due to faulty products or completed operations
  • Negligent acts of hired contractors.

Is a legal suit necessary for availing the benefit of a CGL insurance policy?

Legal suit is necessary in most of the cases for availing the benefit of a CGL insurance policy. Commercial general liability insurance policy is designed to cover the claims arising out of non-employee related injuries or property damages that occur due to insured company’s business operation, premises, products, advertising mistakes and completed operations. Basically, CGL policy offers a cover for some common lawsuits that arise in the day to day business activities. CGL policy covers ‘third-party lawsuits’. However, medical payments cover of CGL does not require any law suit

How frequently is a CGL policy required in today's world?

Corporates require continued CGL policy coverage. Commercial general liability insurance is very important for corporates to stay protected against any financial loss that may arise due to claims for bodily injury or property damage resulted out of business operations, product, premise, completed operations or advertising mistakes. Policy provides an extensive coverage by protecting your business from third party claims. And claims from third party may arise even after the discontinuation of business.

What does Product Completed Operation Liability mean?

Any liability arising out of bodily injury or property damage caused due to insured company’s product or any completed business operation conducted away from insured company’s premises are known as product completed operation liability. Product completed operation liability cover is a section in most of the commercial general liability insurance policy. This section of the policy intends to protect the business contractors against the claims of bodily injury or property damage resulting from their completed work or business operation.

What does false arrest mean?

In legal term, false arrest means an arrest made without any probable cause or warrant (order issued by a court of competent jurisdiction). Basically, false arrest is physically detaining a person without any legal rights or on the basis of groundless allegations. Although, law enforcement officers can be sued for such type of wrongful or false arrest, it is more commonly conducted against private security firms. Most of the commercial general liability insurance provides coverage for false arrest as it is considered as personal injury offense.

What is malicious prosecution?

Malicious prosecution is an intentional wrongful act of filling a lawsuit against someone on baseless grounds. Commercial general liability insurance policy provides coverage for malicious persecutions under the section personal injury and advertising liability. Let’s say an organization covered under commercial general liability insurance had started the wrongful act of legal proceeding against a person. And the proceedings end in the favour of defendant on the grounds of malicious prosecution. Now, a person who is a successful defendant can claim from the organization who started the malice legal proceedings for any personal injury caused due to malicious prosecution. CGL policy purchased by the organization will cover such claims.

What comes under property damage?

Under commercial general liability insurance, property damage means physical injury to a tangible property as well as the damages for the loss of use of physically injured tangible property and a property that has not been physically injured. Commercial general liability insurance covers claims against the property damage caused to third party arising out of business operations, products, premises, and completed operations. However, any damages caused to property owned, occupied or rented out by the named insured is not covered under the commercial general liability insurance.

What happens if I discontinue my CGL policy?

When you discontinue your CGL policy for the business, you will no longer be provided against any indemnity cost or defence costs arising out of bodily injury or property damage caused due to business operation(discontinued), products or completed operations after the policy was discontinued. Even if you discontinue the business, you can still purchase commercial general liability policy for discontinued operations which provides you protection against the claims that arise for the injuries or damages occurred after the discontinuation of business.

How will a CGL policy help my business in the long run?

Being in a litigious society, it’s quite likely to face a claim and litigation for any business activity. And fighting the litigation is expensive most of the times. Commercial general liability insurance policy is extremely important for the business as it provides comprehensive coverage and protection by paying the legal fees associated with defending a lawsuit against your business as well as any settlement or court award which can help your businesses long run operation.

I run a construction and furniture business. Is standard coverage enough for me?

As construction and furniture business involves lot of risk element, policy coverage has to be comprehensive. Standard commercial general liability insurance provides comprehensive coverage against claims arising out of bodily injury or property damage to third party caused due to business operation, product, premises and completed operations. You are also provided coverage for claims related to services and products that you have completed. For example, any injury to homeowner due to improper installation of kitchen cabinets are covered. Specifically, for construction and furniture business, an extended coverage is required for contractor error or omission coverage is needed to cover claims arising out of negligent work of contractors. You can also opt a coverage for personal and advertising injury.

Does Product Completed Operation Liability come under standard cover?

Yes. Product completed operation liability come under standard cover. CGL provides coverage for claims arising out of insured business’s products or completed work. It protection to manufactures and sellers of product. And also, the contractors and service providers are also protected under this cover.

Is damage to property covered under CGL?

Commercial general liability insurance covers damage to property of third party caused due to business operations, products, premises, completed operations, advertising and personal injury. However, commercial general liability insurance excludes the property that the insured owns, occupied and rented out. ‘your work’ and ‘your product’ in the CGL policy wordings specifically refers to particular part of real property on which insured or his contractor is performing operations.

What does Personal and Advertising Injury protect against?

Personal and advertising injury liability protects against any claims for injury arising out of any of the below offenses:

  • False arrest, imprisonment or detention
  • Malicious prosecution
  • Libel, slander or disparagement of goods, products or services
  • Wrongful eviction, wrongful entry, or invasion of private occupancy of a room, premises or dwelling
  • Oral or written publication of material that violates a person’s right of policy
  • Copying another’s advertising idea
  • Infringing about other’s copyright

What is the extent of coverage that CGL offers?

Generally, commercial general liability insurance policies are written on an occurrence basis. It also available in claim-made format. Three main coverage of the policy are-

  • Bodily injury and property damage
  • Personal and advertising injury
  • Premises medical payments

CGL policy is a comprehensive plan. Insured can also customize the policy as per requirement with the below extensions provided by the policy-

  • Sudden and accidental pollution
  • Transportation liability extension
  • Vendors endorsement
  • Technical collaborators endorsement
  • Batch clause

. Does the coverage of Medical Payments require a legal suit?

No. Coverage for medical payments under commercial general liability insurance does not require any lawsuit to be filed. Let’s say, if someone is injured on insured’s premises or property or because of any negligence or mistake of insured company’s employee, CGL policy voluntarily makes a payment for injured’ s medical care under medical payment coverage without requiring them to file a legal suit. Many a times, paying voluntarily without any legal suit for medical expenses maintains organizations reputation.

Do professional acts come under the purview of CGL insurance?

No. Commercial general liability insurance is designed to cover liabilities arising out of non-professional acts. This means any liability arising out of violating the business, personal or the property interests of private citizens resulting in bodily injury or property damage, personal and advertising injury are covered. Medical payments for the injuries arising out of non-professional acts are also covered under commercial general liability insurance.

I have a high-risk business of transporting hazardous chemicals. Is a standard CGL cover enough for me?

In this case, standard CGL may not just be enough. Although standard CGL policy provides comprehensive coverage, you may have to seek extensive cover for transportation liability extension as you are involved in a high-risk business of transporting hazardous chemicals. Transportation liability extension cover under CGL policy provides a coverage for any liabilities arising out of transportation of hazardous substances or materials.

I already have a fire insurance policy. Why should I opt for Act of God Perils Extension under CGL?

Act of god perils extension in commercial general liability insurance covers the costs incurred for defending a case, cost of bail bonds in case of traffic law violations and accidents, cost of bond to release attachments and interest on full judgement. On the other hand, fire insurance covers damage or loss to insured’s property because of fire.

How is a Batch Clause extension beneficial to me?

Batch clause basically provides coverage for claims resulting from defective products of a specific production batch or a cycle within a single occurrence limit. Most of commercial general liability insurance provisions for batch clause extension states that only one retention is applicable to each wrongful act, irrespective of the number of claims resulting from that wrongful act. This means, every claim is not considered as a separate occurrence unless it is specifically stated in the policy.

What does the benefit of Medical Payments cover?

Medical payments cover basically keeps the reputation of company intact among the community by paying for medical bills of injured third party without even him filing a legal suit. This section of CGL cover protects the business by compensating the medical expenses to someone who is injured on the business premise or due to any negligent act of insured company’s employee.

What is the policy period?

Most of the commercial liability policies are for 12 months. And the policy can be extended for an additional period of less than 12 months.

When does the coverage start?

Commercial general liability insurance cover starts from the date of effect of the policy. However, application of coverage may vary depending on the format that CGL policy follow. If the purchased CGL policy follows occurrence format, it covers only those claims in which claim event (injury/damage) has occurred during the policy period. On the other hand, if CGL policy follows claims-made format, policy provides coverage for claims that are reported during the policy period, regardless of the time of occurrence of claim event.

Are recalled products and guarantees included in the coverage for CGL policy?

No. Commercial general liability policy does not cover necessary costs involved in recalling products and also product guarantee.
Product recall cover refers to necessary and reasonable expenses incurred for recalling the products from retailers to the manufactures premises. Recalled products are the ones that are failed to perform their intended function. Product recall requirement arises if there is a possibility for insured to incur legal liability which may arise due to bodily injury or damage by using or consuming insured’s products.
Product guarantee refers any expenses incurred for repairing, removing, replacing or reworking and recovering the products that have failed to perform their intended function due to faulty installation, manufacture, design etc after unauthorized acceptance by customers.

What kinds of extensions are beneficial for FMCGs?

FMCGs involving chain of supply can go for below extensions of CGL policy along with the standard cover for bodily injury or property damage, advertising injury and medical payment cover.

  • Coverage for additional insured: contracts for goods and services pose the risk that one party will be liable for the act of another party.
  • Product Liability cover: under this, policy indemnifies the manufacturer, retailer and wholesaler against third party bodily injury or property damage claims arising out of the use or consumption of the product manufactured, disposed, handled or sold to the consumers

Will I receive any compensation for personal injury and damages?

Yes. You can be compensated for personal injury and damage under CGL policy. In commercial general liability insurance, term ‘personal injury’ refers to any damages to person’s reputation, character and position in the community as a result of slander or libel. Below are some of the offenses that are treated as personal injury and damages for the purpose of compensation:

  • False arrest, imprisonment or detention
  • Malicious prosecution
  • Wrongful eviction from, wrongful invasion of the right of private occupancy of room, premises or dwelling that a person occupies, committed by owner, landlord or lessor or committed on behalf of them.

What is the maximum amount of coverage offered?

CGL policy works on general aggregate limit basis. Maximum amount of coverage offered to insured business depends on below factors

  • The nature of business and the operations undertaken by the insured
  • Type of work performed and to whom
  • The total gross receipts of the company insured
  • Size of the business
  • Territories the business operates in
  • The hazardous or dangerous activities
  • Previous claims if any

What is the procedure to extend my coverage?

CGL policy covers wide range of liability exposures which are generally faced by an organization. Along with standard coverage policy provides various extensions which can be availed at extra cost. Few of them are-

  • Damage to rented premises
  • Sudden and accidental pollution liability
  • Vendor’s endorsement
  • Advertising injury and personal injury liability coverage
  • Written and oral contractual liability: property damage/bodily injury
  • Medical expenses coverage
  • Coverage for additional insured

Is the insurance policy wording applicable in international court of law?

Yes. Most of the standard commercial general liability insurance policy wordings are applicable worldwide in international court of law.

What will happen to my policy legal defence and reimbursement?

Commercial general liability insurance policy gives the insurer a right and duty to defend its insured in case of potential claims. And such duty to defend ends when the policy limit is exhausted by paying the cost of defence and settlement. Insurance company has right to ask for reimbursement of defence cost if it reserves its right to dispute the coverage and seeks the court ruling as to whether the raised claim is covered under the policy.

What is the maximum limit for Medical Payment?

Medical limit is applicable to all primary care treatment and covered Medicare expenses for bodily injury to anyone which has resulted due to any one accident. It’s kind of a ‘’no fault’’ coverage which requires no lawsuit to be filed for paying a compensation. Considerable amount of coverage is provided for compensating the third parties who are injured at insured’s premises by their business operation. Maximum limit for medical payments may vary from insurer to insurer regardless of number of insureds against whom the claim is made. Limits are not set basis the claims brought against the insured and persons making the claim.

What are the additional covers available under CGL policy?

Some of the additional covers offered by insurers under CGL policy are-

  • Sudden and accidental pollution extension: It covers unexpected losses arising from a pollution event. specifically, any damage or injuries resulting from short period pollution caused due to business activities are covered.
  • Unnamed vendors endorsement: This extension provides coverage to specified vendors of the insured and indemnifies them against a legal liability resulting due to distributing or selling insured’s product.
  • Technical collaborators endorsement: Provides a coverage against any liability arising due to defective designs and processes supplied by technical collaborators.
  • Transportation liability extension: Injuries and damages resulting from transportation of hazardous products are covered under this extension.
  • Art of Gods perils extension
  • Batch clause coverage
  • Damage to rented premises
  • Oral and written contractual liability for bodily injury and property damage

Is any liability arising out of illegal transaction covered under CGL?

No. Liability or financial loss arising out of illegal transactions are not covered under commercial general liability insurance policy. That means, any bodily injury or property damage caused to third party wilfully or intentionally by the insured business organization or its employee is not covered under the commercial general liability policies.

What legal liability does CGL not cover?

Some of the legal liabilities not covered under Commercial general liability insurance are-

  • Intentional illegal acts: Any injuries and property damages caused to third party wilfully are not covered under commercial general liability insurance.
  • Employee injuries: Bodily injuries or property damage caused to employee are not covered under CGL policy. It only covers third parties. Such losses to employees are covered under Workmen Compensation policy
  • Professional liability: CGL policy does not give protection against liabilities arising out of professional negligence and errors. The same cab be covered under a separate insurance product called Errors and Omission Insurance.
  • Liquor liability: CGL policy does not provide a coverage for liabilities arising out of selling or distributing alcoholic beverages. However, same can be added to standard policy as an additional coverage at an extra premium.
  • Bodily injury or property damage caused due to an act of terrorism, war and nuclear activities.
  • Standard CGL policy does not cover injuries or damages to third party due to pollution event arising out of business operations. However, same can be availed as an extensive cover at an additional premium.
  • Electronic data
  • Damage to own work
  • Damage to own property and product
  • Silica, asbestos

What kind of premium do I have to pay for CGL?

Commercial general liability insurance policies work on ‘Estimated premium’ basis which is also known as ‘premium audit’. Basically, at the inception of the policy, premium is decided based on the estimated payroll and sales. Estimated amount is paid as deposit premium at the inception of the CGL policy. When the period expires, insurer will determine the premium based on the books and records of the insured. In case, the estimated premium is less than the actual payroll and sales, then insured may need to pay the extra amount as premium. Likewise, if the estimated premium is more than the actual payroll and sales, then insurer may return the extra premium paid.

What factors decide the valuation of a premium in CGL?

Valuation of premium by insurance company’s underwriter depends on many factors. Each insurer’s risk evaluation method is different. However, some of the common factors considered to determine the premium rate under commercial general liability insurance is as below-

  • Perceived risk of your business: Amount of risk associated with the business and the industry are considered. For example, construction and furniture business may be considered risky as their work occurs on third party’s property.
  • Place and country of business operation
  • Company’s financial position and rate of loss

What documents do I need to avail the benefits of a CGL policy?

To make a claim and to receive benefits under commercial general liability insurance, it’s important to notify the insurer in writing as soon as the occurrence of accident which may result in claim. Notice to insurer must include the following details-

  • Time, place and circumstances of the accident that took place resulting in damage or injury
  • Details of injured person such as name and address along with the witnesses
  • Detailed description of injury or damage caused due to occurrence of accident
  • In case of a lawsuit-

  • Produce the legal notices, summonses or demands received regarding the claim to the insurance company
  • Written notice of claim along with all the details of claim event and injury or damage.

In case of a legal suit, what kind of notice do I need to send the insurance company?

In case of a legal suit, you are required to send notice of claim to insurance company in writing. Its basically notifying the insurance company that the loss has occurred. However, such notice of claim or occurrence of claim event needs to be sent to insurance company within a stipulated time limit in a particular manner. Notice of claim must contain sufficient details such as time, place, circumstance and a description of occurred claim event along with witnesses and injured person or property detail. An insufficient information in notice of claim may result in loss of coverage.

What information should the notice of occurrence contain?

Its insured’s duty to notify the insurance company on the occurrence of claim event. Notice of occurrence to the insurer must include place, time and circumstance of the occurrence. The resulting bodily injury or property damage has to be mentioned with clear descriptions along with the details of injured person such as name, address etc along with the witnesses. Notice of occurrence cannot contain any false, misleading or incomplete information. Insured can be penalised for notice with false information.

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