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How much are Commercial General Liability Insurance Policy?

Submitted by admin on September 26th, 2024

Today, public understanding about company operations and workspace conditions is very well established. And when they are revealed to be infringing the existing laws in its jurisdiction (which could be by sueing for damages from customers or someone else) Thus, corporate sector calling for ‘fair business’ during their time to soul business. There is a case where a customer has Bodily Injury or Property Damage in the Business Premises belonging to the Insured and that leads a lawsuit against the business owner for its losses. A Commercial General Liability Insurance Policy can help a business owner safeguard himself from the lawsuits for Bodily Injury or Property Damage.

Commercial General Liability Insurance Policy

Commercial General Liability Insurance Policy: Protects your business from Property Damage or Bodily Injury claims. It is not fault-based coverage, which means it will simply cover your costs no matter what caused the damage or injuries. Commercial General Liability Insurance Policy It is mixed form of Public Liability Though it stresses on postulation fact Product Hazard, I would like to classify this as separate type of Risk Transfer System.

Factors Affecting the Cost of a Commercial General Liability Insurance in India

Some of the determinants that influence the Commercial General Liability Insurance Costs are:

Mandatory Limit of Liability: Limit of Liability in a CGL Policy is the single most important thing that impacts CGL Policy Premiums. A Policy with a Limit of Liability of Rs20 crore is costlier than the a CGL Policy with a Limit of Liability of Rs10 crore, all other things same.

Business Revenue: A big swing in CGL Insurance Policy Premiums can also stem from Company Revenue. This is where the premium a company pays for their CGL Insurance Policy enters into play as the higher an organisation generates in income the more it has to pay for its insurance.

Continent and Jurisdiction: In India, a business can either choose Worldwide Territorial and Jurisdiction coverage for their Commercial General Liability Insurance Policy (including USA/Canada) or they also have an option of restricting the Territory & Jurisdiction coverage to India only. Premium of Policies with Worldwide Territory and Jurisdiction Coverage shall be higher than the premium for those having their T&J Coverage restricted to India only

Nature of Business and Industry: If the Insured is in a high-risk industry e.g. Hospitality Industry then chances of Claims will be more and hence, the Premium for Commercial General Liability Insurance Policy shall also be on higher side as compared to the Premium whilst an Insured is running his/her business in low-risk industry (e.g. Consulting).

Prior Claim Experience: A company that has a favorable claims experience will have a lower premium for their Commercial General Liability Insurance Policy than an organization that has historically reported Insurance Claims.

Employees: An employer can be held accountable for the conduct of his or her employees. E.g.: If an employee damages the property of a third party, if such third-party has raised a claim on business against any such actions than CGL Insurance Policy provides coverage for the same. This ultimately leads to the greater number of workers that business employs, and so the higher the risk. Hence, the Premium of a Commercial General Liability Insurance Policy is more in the case of businesses that have several workers than in those which do not employ many workers almost similar except for other things.

Deductible: A higher deductible results in a lower premium for Commercial General Liability Coverage. But if he selects higher deductible then Insured has to borne higher amount on his own.

What is the Cost of a Commercial General Liability Insurance Policy in India?

Usually, a Commercial General Liability Insurance Policy with a Limit of Liability of Rs15 Crores costs Rs1.5 lakhs to Rs2 lakhs. However, as mentioned above, the premiums vary on factors like Limits of Liability, Nature of Industry, Prior Claims Experience etc.