What is a Commercial General Liability Insurance Policy?
A Commercial General Liability Insurance policy protects your business against claims of property damage or bodily injury. This coverage is not fault-based, so it can cover your expenses regardless of the underlying cause of the damage or injury. A CGL Insurance Policy is a combination of a Public Liability Insurance Policy and a Product Liability Insurance Policy.
How much does a Commercial General Liability Insurance Policy cost?
The cost of a Commercial General Liability Insurance Policy depends on various factors. Usually, The CGL Policy cost for high-risk businesses which are more prone to claims of bodily injury and property damage will be higher than the CGL Policy Cost for low-risk businesses.
Factors that Affect Commercial General Liability Insurance Costs
Various factors that influence Commercial General Liability Insurance Costs that include the following:
1. Limit of Liability Required: Limit of Liability is one of the most important factors affecting CGL Policy Costs. A CGL Policy with a limit of liability of Rs20 crore will be more expensive than a CGL Policy with a Limit of Liability of Rs10 crore, all other factors remaining the same.
2. Revenue of the Business: Company Revenue is also an important determining factor for CGL Insurance Policy Premiums. Companies with a higher revenue will typically have to pay a higher premium for their CGL Insurance Policy.
3. Territory and Jurisdiction Required: Businesses in India have an option of choosing Worldwide Territorial and Jurisdiction coverage for their Commercial General Liability Insurance Policy or restricting their Territorial and Jurisdiction coverage to India only.
4. Nature of Business and Industry: If the Insured is operating in a high-risk business or a high-risk industry, like Hospitality Industry, the Commercial General Liability Insurance Policy Premium will be higher as compared to the Commercial General Liability Insurance Premium that would be charged for a low-risk business or a business operating in a low-risk industry, say like a Consulting Business.
5. Prior Claim Experience: A Business with zero claims in the past will be charged a lower premium for their Commercial General Liability Insurance Policy than a business that has reported claims in the past.
6. Deductible Amount: A Commercial General Liability Insurance Policy with a higher deductible will have a lower premium. However, a higher deductible means that the Insured will have to bear a higher amount from his own pocket in case of a claim as compared to a CGL Policy which has a lower deductible.