Commercial General Liability Insurance
Exposure
About Us
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EXPOSURE
Liability – Legal View Civil Liability
Statutory Liability (e.g. Public Liability Act, Motor Vehicle Act etc)
Tort Liability(e.g. Common Law Judgment, Public Liability, Product Liability etc)
General Liability claims are generally based on negligence due to not keeping the environment safe from which it operates
Products liability claims can be based on negligence, strict liability, or breach of warranty of fitness depending on the jurisdiction within which the claim is based
Consumer Protection Act 2019 Some of the laws which have protected the interest of the consumers against faulty products would include, among others: • The Consumer Protection Act, 1986; • The Indian Contracts Act 1872;
• The Sale of Goods Act 1930; • The Drugs and Cosmetics Act, 1945; and • The Prevention of Food Adulteration Act, 1954.
Consumer Protection Act 2019 The New Act defines product liability as "the responsibility of a product manufacturer or product seller, of any product or service, to compensate for any harm caused to a consumer by such defective product manufactured or sold or by deficiency in services relating thereto." The impact is that it is not only the manufacturer who will be liable to compensate a consumer but also the seller
Types of Claims General Liability Claims
Product Liability Claims
Slip-and-Fall Accidents Trip-and-Fall Accidents Falls from Heights Being Struck by an Object Swimming Pool Accidents Dog Bites Elevator and Escalator Accidents Electrocutions Inadequate maintenance of the premises Toxic fumes or chemicals Fire-Related Accidents
• Design defects • Manufacturing defects • Defects in marketing
About Commercial General Liability Insurance
About Us
Commercial general liability (CGL) is a type O R E M I Ppolicy S U M that DOLO R S I T Acoverage MET of Linsurance provides to a business for
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✓ property damage caused by the business’
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CGL
What Qualifies As Bodily Injury
• Bodily injury” means bodily injury, sickness, or disease sustained by a person, including death resulting from any of these at any time. • Most CGL policies cover “bodily injury” caused by an “occurrence”, which is typically defined to mean an accident, including the continuous or repeated exposure to the same harmful conditions, for which the insured is legally obligated to pay damages to another.
BODILY INJURY
Property Damage • Physical injury to tangible property, including all resulting loss of use of that property. Ex. • Loss of use of tangible property that is not physically injured.
Ex. Falling glass prevented the public from accessing the restaurant. Even though the restaurant suffered no physical injury to its property, the restaurant alleged that its property was rendered useless and, thus, suffered loss of use of tangible property.
• Loss of use occurs whenever there is an interruption of normal use of property. This interruption may be caused by a tangible, physical blockage of access to property. The unifying factor … is that the property in question … cannot be used. • Damages payable by a commercial general liability (CGL) policy because of loss of use are a type of damage that are the consequence of not being able to use property. • Tangible property that does not experience physical injury if that property suffers intangible damage, such as diminution in value. diminished value or the cost of repair are not usually considered loss of use damages.
Structure of CGL Insurance
CGL Bodily Injury And Property Damage Liability
General Liability
Product Liability
Personal And Advertising Injury Liability
Medical Payments
Tenant legal Liability
Nil Deductible
Covers bodily injury or property damage that
Coverage of CGL Arises from operations you are performing on or off your premises
Occurs on your premises
Arises from work you have completed; or
Arises from products you have made or sold
Coverage of CGL Personal And Advertising Injury offenses into two categories
Those committed in the course of advertising activities called as advertising injury
Other than bodily injury called as personal injury which arises out of a number of enumerated offences including privacy breaches and slander
Extension under CGL
72 Hours Sudden and Accidental Pollution
Technical Collaborations
Care, Custody and Control
Act of God
Waiver of Subrogation wherever required by contract
Incidental Medical Malpractice
Discharge of treated effluents
Food and beverages
Transportation Liability
Contractor & Subcontractor
Control Group Clause
Lift Liability
Unnamed Vendor
Cross liability
Travel of Executive for non manual work worldwide
Additional Insured wherever required by contract
Product Recall
Product Guarantee and Financial Loss
Exclusions under CGL
Product Efficacy
Contractual Liability
Products that left your control prior to the period of insurance
Impaired property
Aircraft, Auto and Watercraft
Faults arising from poor workmanship
Claims brought outside the jurisdiction limits or occurring outside the territorial/geographical limits
Noncompliance of any statutory / regulatory provisions
Damage to own property
Employers’ Liability
Damage to own product
Pollution
Criminal fines and punitive damages
Financial losses to a business or person caused by your faulty product (for example, where your product is used by another company to manufacture another product – if it fails but doesn’t cause any damage and they have to stop production, the lost production may not be covered – and the replacement or repair costs of the product itself will not be covered)
What is product recall? •A Product Recall is the act of removing a batch or production run of products from the marketplace. •Trigger point – When the products in question pose an imminent threat of bodily injury or property damage. As per the New Act if the central authority is satisfied based on investigation that there is enough evidence to establish violation of consumer rights or unfair trade practices, it may pass an order which could include: recalling of goods or withdrawal of the goods; reimbursement of the price of the products or services so recalled to the purchaser; and discontinuation of practices which may be unfair and prejudicial to the consumers interest.
PRODUCT RECALL
Product Recall Coverages First Party Expense • Notification of customers • Shipping costs • Warehouse and storage expense • Cost to dispose of products
• Cost of extra personnel required to conduct the recall
Thirty Party Expense • Recall expenses of the third party for the recall of any product that uses your product • Business Interruption of third parties using your product • Cost to repair and rehabilitate third party’s reputation • Additional cost to purchase substitute products to replace your products
Product recall exclusions Where a product recall is necessitated by a product defect which has arisen solely due to : Exposure to weather or the deterioration or decomposition of product The fact that a product does not accomplish its intended purpose or comply with other implied statutory warranties or has passed its shelf life Contamination or other defect arising out of bioengineering or GM treatment Failure of any third party to store or consume the product in the prescribed manner Prototypical or experimental products which, by their very nature, are expected to experience problems in the nascent stages of development Product recalls which are force upon the insured by the government or public authority, in circumstances where the insured would not have conducted the recall but for the said intervention
EXCLUSIONS
What is Product Guarantee & Financial Loss?
• Product Guarantee Insurance provides cover that have failed to perform their intended function due to faulty design, manufacture and installation, after handover to the customer. • It does not require injury or damage to have occurred (unlike a product liability policy) nor does it require the risk of injury or damage (unlike a product recall policy), but simply guarantees the product, as a 'safety net' for the quality management processes of the policyholder. • The only prerequisite is that it fails to perform the intended function.
PRODUCT GUARANTEE AND FINANCIAL LOSS
What is Product Guarantee & Financial Loss? • It goes together with Financial Loss and Product Recall Insurance. • Products Guarantee - the costs of removing, repairing, replacing, reworking or recovering products that have failed to perform their intended function due to faulty design, manufacture, installation etc., after unqualified acceptance by a customer; • Financial Loss - incurred by a third party as a direct consequence of the defective product and for which the policyholder is legally liable. These may include the customer’s recall costs, advertising costs, additional warehousing costs, additional staff costs, destruction costs, downtime and loss of profits.
PRODUCT GUARANTEE AND FINANCIAL LOSS
What is Liquidated Damage Insurance?
1 • There are always factors beyond your control – such as bad weather or supply chain issues – which could hinder your ability to meet your timelines.
2 • These types of delay could incur financial damages to your clients for which your company could be held contractually liable. But with Liquidated Damages Insurance, you can be protected against these costs.
3 • Liquidated Damages Insurance is extra cover that protects you against a specific breach of contract – if you are unable to deliver a project on time
• The responsibility for a defective product depends on the manufacturer, retailer or supplier. If any defect is found out in the process of producing goods, then the manufacturer will be liable. • Once the product is sold to the public via a retailer the latter may also be held responsible for the supply of defective product. • Burden of proof lies on the claimant and he has to prove that whatever injury he has suffered, is caused by defective product, which is produced by the manufacturer or supplied by the supplier.
• A client comes to your office. They slip on the polished floor and hurt their knee. • A delivery person trips over loose stones in the pathway to your office door and falls, hurting their back. • ‘Liability’ is a term used frequently in the insurance industry, but what does it mean? To be liable for something simply means you’re legally responsible for it. So, liability insurance protects you if you’re alleged to be responsible for injury you accidentally cause to someone or if you damage their property.
HEADING
Thank You
Disclaimer The information and material provided in this presentation do not constitute an offer or solicitation for the purchase or sale of any security and financial
instrument. The information may be obtained from various sources and PINC and/or its affiliates do not represent that the information is accurate or complete, and it should not be relied upon as such. PINC accepts no liability whatsoever for any direct or consequential loss arising from the use of this material or its contents. All estimates and opinions provided herein constitute the original researcher’s judgment as of the date of the report and may be subject to change without notice. PINC will not be responsible for the consequences of reliance upon any opinion or statement contained herein. The returns on the products discussed in this material are not guaranteed by any bank unless specifically stated and are subject to investment risks, including possible loss of the principal amount invested. An investment in any product should be made only after careful study of the most recent sales prospectus, term sheets, relevant fund regulations and basic legal information contained therein. Furthermore, investments in foreign currencies are subject to exchange rate fluctuations. Before entering into any transaction, you should consider the suitability of the transaction to your particular circumstances and independently review (with your professional advisors as necessary) the specific financial risks as well as legal, regulatory, credit, tax and accounting consequences.