What Is Comprehensive General Liability (CGL) Insurance?

Before we begin, Comprehensive General Liability Insurance is sometimes called Commercial General Liability Insurance outside Malaysia or simply General Liability Insurance. In Malaysia, it is more commonly called Comprehensive General Liability Insurance.

Confused? Ok, you're ready for more then.

As a business owner, you need to protect your investment and safeguard your company from potential risks. One of the most effective ways to do this is by securing Commercial General Liability (CGL) insurance. This type of insurance protects businesses from a wide range of potential claims and lawsuits, ensuring that you can continue to operate and grow without fear of financial catastrophe.

In this comprehensive guide, we will explore what CGL insurance is, what types of businesses it covers, what it includes, and what it does not cover. By understanding the ins and outs of CGL insurance, you can make an informed decision about the level of protection your business needs.

General Liability insurance (CGL) is a comprehensive policy designed to protect businesses from a wide range of potential risks and liabilities. It covers businesses for claims arising from third-party property damage, bodily injury, and personal and advertising injury. These claims can result from accidents or incidents that occur on your business premises, as well as those that arise due to your products or services.

General Liability insurance is essential for businesses of all sizes, as it helps protect your company's assets and financial stability in the face of unexpected claims and lawsuits. Without General Liability insurance, businesses can be exposed to significant financial losses that can result in bankruptcy or closure. Moreover, it is often required by clients, landlords, or lenders as a condition of doing business with them.

By having General Liability insurance, you demonstrate your commitment to safeguarding your business and the interests of those you work with.

It is important to note that General Liability insurance is not a one-size-fits-all solution. Policies can be tailored to fit the specific needs and risks of your business. This means that you can choose the coverage limits and endorsements that are most appropriate for your industry, operations, and potential exposures.

Working with an experienced insurance agency in Malaysia can help ensure that your General Liability policy provides protection for your business needs.

What Type Of Business Does General Liability (CGL) Insurance Cover?

General Liability insurance (CGL) is designed to cover a wide range of businesses, from small startups to large corporations. This broad coverage makes it an essential component of any comprehensive business insurance portfolio. Some of the types of businesses that can benefit from General Liability insurance include:

Retail stores and restaurants

These businesses face customer injuries, property damage, and advertising injuries. General Liability insurance can help protect retail stores and restaurants from the financial fallout of these incidents.

Construction and contracting businesses

Construction and contracting companies are exposed to risks such as property damage, bodily injury, and damage caused by their completed work. General Liability insurance can help protect these businesses from the financial repercussions of claims arising from these risks.

Professional service providers

Professionals such as consultants, accountants, and marketing agencies can face claims related to errors and omissions in their work or services. While General Liability insurance does not cover errors and omissions claims, it can still provide protection for other risks these businesses face, such as third-party property damage or bodily injury.

Manufacturers and wholesalers

These businesses may be held liable for injuries or damages caused by their products. Comprehensive General Liability insurance can provide coverage for claims arising from product liability, as well as other potential risks these businesses face.

Nonprofits and community organizations

Nonprofit organizations and community groups can also face risks such as property damage, bodily injury, and advertising injuries. Comprehensive General Liability insurance can help protect these organizations from the financial consequences of these claims.

It is important to note that each industry and business type may have unique risks and exposures that require additional insurance coverage beyond a standard Comprehensive General Liability insurance policy. It is essential to work with an experienced insurance agent to ensure your business has the appropriate coverage for your specific needs.

What Does Comprehensive General Liability (CGL) Cover?

Comprehensive General Liability (CGL) insurance provides coverage for a wide range of potential claims and lawsuits that businesses may face. The primary areas of coverage include:

It is important to note that Comprehensive General Liability insurance typically includes limits on the amount of coverage provided for each of these areas. These limits can be adjusted to meet the specific needs and risk exposures of your business. Additionally, endorsements can be added to your Comprehensive General Liability policy to provide coverage for specific risks that may not be included in a standard policy.

While General Liability (CGL) insurance provides broad coverage for many potential risks and liabilities, there are certain areas that the policy does not cover. Some of the most common exclusions include:

Bodily injury

CGL insurance covers claims arising from bodily injuries sustained by third parties on your business premises or as a result of your products or services. This includes medical expenses, lost wages, and legal defence costs associated with these claims.

Property damage

CGL insurance provides coverage for claims arising from damage to third-party property caused by your business operations, products, or services. This can include damage to a customer's property while you are performing a service or damage caused by a product you manufacture or sell.

Personal and advertising injury

CGL insurance covers claims arising from personal and advertising injuries, such as libel, slander, copyright infringement, and misappropriation of advertising ideas. These claims can result from your business's marketing materials, social media posts, or other promotional activities.

Legal defence costs

CGL insurance covers the legal defence costs associated with covered claims and lawsuits, including attorney fees, court costs, and settlements or judgments. This coverage helps ensure that your business can mount a robust defence in the face of litigation, without draining your financial resources.

It is important to note that CGL insurance typically includes limits on the amount of coverage provided for each of these areas. These limits can be adjusted to meet the specific needs and risk exposures of your business. Additionally, endorsements can be added to your CGL policy to provide coverage for specific risks that may not be included in a standard policy.

What Is Not Included In General Liability (CGL) Coverage?

While General Liability (CGL) insurance provides broad coverage for many potential risks and liabilities, there are certain areas that it does not cover. Some of the most common exclusions include:

Employee injuries

CGL insurance does not cover injuries sustained by your employees while they are working. Workers' compensation insurance is specifically designed to provide coverage for employee injuries and is typically required by law.

Professional errors and omissions

CGL insurance does not cover claims arising from errors, omissions, or negligence in the provision of professional services. These claims require separate professional liability insurance, also known as errors and omissions (E&O) insurance.

Damage to your property

CGL insurance does not cover damage to your own business property. To protect your business property, you will need to secure a separate commercial property insurance policy.

Employment practices liability

CGL insurance does not cover claims arising from employment-related issues, such as harassment, discrimination, or wrongful termination. To protect your business from these claims, you may need to obtain employment practices liability insurance (EPLI).

Cyber liability

CGL insurance does not cover claims arising from data breaches, cyber-attacks, or other technology-related issues. Cyber liability insurance can provide coverage for these risks, helping to protect your business from the financial consequences of a cyber incident.

Understanding the limitations of your CGL policy is essential to ensuring that your business has the appropriate insurance coverage in place. Work with an experienced insurance agency to identify any gaps in your coverage and secure the appropriate policies to protect your business from potential risks and liabilities.

In A Nutshell

- General Liability insurance provides a wider coverage than Public Liability Insurance (hence a slightly higher premium rate). 

- Typically a contractual requirement especially when working with regional clients. The most common industries that require this is the oil & gas industry.

- This is a 'non-standard insurance product' (unlike the typical home or auto insurance). Hence not all providers will accept insuring your business if you require a high insurance limit. 

- Commercial General Liability insurance can include Product Liability Insurance components within its policy. But if you're looking for the latter. Then visit our blog article on Product Liability Here.

But Fret Not

Cover Buddies is Malaysia's preferred insurance provider and Comprehensive General Liability (or Commercial General Liability Insurance) is something we work on. You can reach out to our professional consultants via WhatsApp, Live Chat (office hours) or Schedule A Free Consultation. Or if you prefer, you can Drop Us A Line with your question, and our consultants will respond to you within 24 hours.