Accidents happen. They can result in bodily injury or damage to the property third parties. A resulting third party compensation claim can cause large financial losses. Accidents that happen in your premises, may result from your employee mistake or be caused by the use of your products. Businesses like Malls, Hospitals, Entertainment parks, Restaurants and Hotels carry a significant third-party injury and damages risk owing to large footfall of customers. A lift accident or a falling object can cause a damage anywhere to anyone. Commercial general liability insurance or a commercial general liability policy can cover contractual liabilities, cross liabilities and vicarious liabilities also.
Bodily Injury or Property damage
Intended to cover the liability of a compensation, when you injure someone or damage others property. A slip at the staircase, fire in premises or a falling loose object can all be source of such incidents leading to claims.
Advertising and personal Injury
Often companies are sued by competitors over an questionable product comparisons or wrong product efficacy claims. A company can also become liable to compensate an individual for harming his personal freedom or reputation.
Most body injuries may not be serious but if ignored can be followed by a resulting body injury compensation claim. The medical expenses limit helps you to provide immediate medical treatment and prevent a possible claim.
All compensation claims whether settled in a court of law or negotiated with the claimant will need expensive lawyers to be employed. Like most other claims, majority of third party claims expenses arise out of defence costs.
Products and Completed Operations
When a completed operation like a newly built bridge or building collapses after construction or a contaminated food delivery causes illness it can bring a liability. These were completed operations or products which needs a cover.
Typical CGL covers do not cover claims due to automobile liability. In many jurisdictions a third party cover is not mandatory. In such cases a Non-Owned or Hired automobile liability cover becomes essential when using such a vehicle.
Your company cannot be held liable unless there is a defect in your product or service. Of course, zero defects, and therefore zero liability, are almost impossible to achieve. You are more exposed than you think. Products catering to Automobile and Aviation sectors have inherent high risk. Companies have been made liable for tyres used beyond prescribed speed limits on a contention that the product should have been made with an eye on how people are likely to use them. A cleaner bottle opened by force due to an stuck cap made the company liable for bodily injury caused by the spilled sulphuric acid on account of faulty packaging. Perfectly bottled and canned food products can be contaminated by the time they are sold. Lift, escalators, cosmetics, pharmaceuticals, garments can all cause injuries. Whatever your product may be, EDIFY can help you identify the need and find a suitable solution which does not burn a hole on your pocket.
Explicit or Implied warranty
Courts across the world have held manufacturers responsible for suitable warning on product usage and customer education. Compensations have been awarded even from implied warranties on suitability of use and sale.
Limited Vendors Liability
When specified Vendors or distributors sell your products, it may also make them liable to a claim arising from sale of a defective product. An extended cover will give them assurance from any claims related to your products.
Technical Collaboration Inclusion
A Technical collaborator bring in substantial contribution to the products you manufacture. They may require you by contract to protect them for any suits which may come on them because of the injury or damage caused by your product.
A recall policy protects you from incurring the cost of recalling a product which is identified as a possible cause of damage or injury which has occurred or has a potential to occur. This policy is bought in conjunction with the product liability and cannot be purchased independently. The costs associated with recalling include the cost of transportation, storage and destruction of the product apart from public relations cover to guard your firm and product reputation. They do not pay for recall of a faulty product design or rejection of product by the customer. They also do not pay for modification or replacement of the faulty product. Having a recall policy in place helps buy the cover at optimal costs.
Associated recall costs
An product recall can lead to substantial expenses. Often there are expenses associated with a recall like the cost of investigation, disposal, travel and accommodation. To ensure adequate cover buy your recall cover from an trusted expert.
While replacement is not an intended cover some insurers may agree to cover the cost of replacement. It is good to ask for a replacement cover possibility in a recall policy when you foresee the same in your business.
The aftermath of a recall may require substantial cost in restoring lost contracts, regaining market share and restoring market confidence. An recall policy should provide for a cover for all such expenses to restore your business.
Third Party Recall
You may be supplying products which becomes a part of your customers product before they are sold. A defect in your product with a potential to cause damage can make you responsible to the cost of recall of you customer’s product.
Some insurers may on specific request provide a cover for recall of a product which fails to meet its guaranteed terms of performance. This is a specific cover given by insurers to specific products for reputed manufacturers.
An event of a recall of the main product is known to drive companies to total financial breakdown, even insolvency. A financial loss protection can also be bought from the insurer to help tide over a financial crisis following a recall.
All manufacturing units involving human labour need to buy workmen compensation policy cover to compensate their workers for any disability or death. Both Workmen compensation for Manufacturing or construction businesses involving labour and ESI cover for employees with lower salaries are mandatory by Indian law. Workers compensation insurance policy has many benefits such as it covers medical expenses from injuries arising from accidents during employment, covers employer's legal liability from an accident to a worker, during the working hours in office premises, covers diseases & illnesses caused due to prolonged exposure to occupational hazards specific to the employer's industry. Workman's liability insurance policy pays the legal compensation decided by the local labour commissioner or court. The best part of a WC liability policy is that it covers the legal liability to all the employees under W.C. Act 1923. While the worker's compensation insurance policy is guided by old laws and small compensation values, this is the only complete legal protection an employer can have in India.
Organisations assume that they are only liable for compensation to their employees on roll. You are also responsible for compensation payment to Security, housekeeping and temporary staff engaged by you, as a Principal employer.
WC or Personal Accident (GPA)
Both provide similar coverage in case of death or disability. The GPA cover is not limited by work related accidents and is flexible on choice of higher sum assured but does not provide the security of unlimited liability cover as in WC.
An Employer’s liability product is intended to protect an employer from claims made by employee’s for any injury and employer may become legally liable for. An Workmen compensation may covers the legal liability of an employer but may still not provide adequate compensation to your employee’s family. While Internationally Employer’s liability can be bought separately, in India a handful of insurers offer this cover as a part of Commercial General liability. You may consider an adequate Group Personal Accident cover which can also to meet the same purpose. Ask EDIFY for the right advise.
A Public liability in its meaning refers to any claim made by third parties for an injury or property damage caused by you. A General liability is a broader cover which provides for many additional covers apart from a Public liability protection.
Industrial and non-industrial Risk
Public liability can be purchased by Industrial units like manufacturing units, construction sites or Malls and Non industrial units including offices, shops, residences. Both serve the same purpose of payment of defence cost and liability.
Public liability act
Companies which are in businesses making or using hazardous goods exposing people to hazards need a Public Liability ACT policy. The Act mandates the cover for such units depending on the size and hazard exposed.