What is

COMMERCIAL GENERAL LIABILITY
INSURANCE

Commercial general liability insurance (also known as general liability insurance or comprehensive general liability) is a broad type of insurance policy meant to cover the liability risks of any businesses. It is a combination of public liability (covering third party property damage and/or bodily injury) and product liability (for companies that sell products), as well as libel, slander, and copyright (advertising injury).

What is the maximum cover you should have?

The limit of liability for all policies is mentioned per claim and in aggregate. The aggregate amount is the maximum amount insurers will cover under this policy. Insurers usually apply different sub-limits for each section of CGL coverage, like products-completed operations, personal and advertising liability, medical expenses or coverage for damage to the premises rented to you. Getting the right amount of coverage with a good understanding of those limitations is important. Most clients select an aggregate sum insured, based on their client’s requirement, without paying attention to sub-limits. This can put their company at risk in the event of a claim.

How much does it cost?

CGL policy is usually underwritten on a ‘claims occurring’ basis, rather than a ‘claims-made’ basis. The premium for a claims-made basis policy is much cheaper than that of the occurrence basis. However, the premium will increase every year as the claims-made policy matures to match the occurrence CGL policy (usually after 5 years). The premium for both policy types will depend on many factors. These include the type of product sold, the volume of business, the area of coverage, etc.

What is CGL umbrella policy?

Under the CGL requirement of your client, you may be asked to purchase an umbrella policy. If this is the case, the umbrella cover is meant to extend the CGL liability amount over the aforementioned maximum aggregate amount – it is an extension of coverage, providing an additional annual limit to your existing CGL policy.

Do CGL policies cover professional indemnity insurance?

No, CGL does not include professional indemnity insurance or cyber liability. It is important to issue separate policies to cover the liability from professional services rendered or from cyber risks. CGL insurance focuses on direct damage/incident caused to a third party, but it won’t cover your company if you are being sued by clients due to contractual or data protection issues.

Is CGL insurance compulsory?

Though CGL is not compulsory, it is very often requested by clients prior to working with your company. They might also request to be named under the policy so that the coverage fully extends to their company.

At Orix Insurance, we can help you find solutions to meet your business requirements. Contact us through our website or email us at hello@orixinsurance.com if you have any questions about commercial general liability insurance.

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