Commercial General Liability Insurance

Commercial General Liability (CGL)policy covers third party liabilities arising from various business operations, be it premises, products and completed operations, advertising and personal injury, or even supplementary payments. The Policy not only protects you against suits and damages awarded by courts but also covers the litigation cost while contesting such claims.Thus a CGL policy covers for third party liability arising out our product & your business premises

A CGL policy usually covers:

• Bodily Injury &Property Damage Liability
  It provides protection against losses from the legal liability of insureds for bodily injury or property damage to others arising out of non-professional / negligent acts or for liability arising out of their premises or business operations. Mental injuries and emotional distress can be considered bodily injuries, even in the absence of physical bodily harm. Defect in your product may cause injury, loss, damage to a third party or his/her property. Even packaging defect which compromises the safety of the product and causes harm to the third party.Improper use of the product, absence of warning labels/ precautions, etc. which affects the performance or quality of the product
• Personal and Advertising Injury
  Personal and advertising injury liability protects an insured against liability arising out of certain offenses, such asLibel, Slander(a sort of published false statement that is damaging reputation), Infringing on another’s copyright, Malicious prosecution, Use of another’s advertising idea, wrongful eviction, entry or invasion of privacy etc
• Medical Payments
  Limited coverage for medical payments includes payments for injuries sustained by a third party caused by an accident that takes place on the insured’s premises or when exposed to the insured’s business operations. Medical payments coverage can be triggered without legal action

Limit of Indemnity

Under the product liability policy, the “Limit of Indemnity” stands for the sum insured. This amount is determined based on two limits which are set for each accident that occurs during a particular policy period. These are- the Any One Accident (AOA) Limit and the Any One Year (AOY) Limit. The Any One Accident (AOA) Limit is the maximum sum payable for an accident, based on the nature of the product insured, the number of people affected, the type of damage, etc. Any One Year (AOY) Limit stands for aggregate of all claims that will be payable in a policy period. Typically, the ratio of AOA limit to AOY limit is selected from the following options:

This policy can be availed by product manufacturers, distributors, retailers and wholesalers. This is regardless of the fact whether the product that is insured is the final product or just a part of the final product. Some insurers also extend this policy to the Export Community, which is legally bound to take Product Liability Insurance

Exclusions:

This policy does not cover liability arising out of or in connection with:

• Product efficacy (product failing to perform its intended function)
• Product recall. The policy doesn’t pay for cost incurred for repairing or reconditioning or modifying the defective part of the product.
• Product guarantee
• Terrorism, war and SRCC
• Any professional services deficiency (that can be covered separately in professional indemnity insurance)
• Fines, penalties and punitive.
• Loss of Goodwill / loss of market

Add on Cover

• Limited Vendor’s Liability (This policy can also be extended to cover vendors. You can get cover for liability arising out of sales and distribution of the insured product by named or unnamed vendors)
• North American Jurisdiction Clause (covering export to American Countries)
• Technical Collaborators Clause
• Designated Premised Endorsement
• Lift Liability Extension coverage
• Food & Beverages cover extension
• Fire Damage Extension
• Act of God Perils extension
• 72 hours sudden & accidental pollution extension
• Transportation extension

Excess:

Minimum Excess is 0.50% of the AOA Limit

Parameter for Premium Consideration:

Premium chargeable depends on the:

• Risk group (products to be covered)
• Turnover of products (for proposed period of insurance)
• Sales territories
• Limits of indemnity selected
• Ratio of limits
• Quality control system and R&D strength of the insured
• Past Claims experience