Liability Insurance – Public, General, Commercial, Event: What’s the Difference?
As the world opens up again, many of us are jumping for joy that we can finally meet in larger groups, host events and even get back to the office. Great for both our social and business lives. Liability insurance becomes more important now as you and your employees are likely working in an office, visiting or working at other premises, or even hosting your own events.
What are the differences in the different Liability insurance policies and in what circumstances do you need them?
Public Liability vs General Liability insurance
This is confusing as Public Liability and General Liability are the exact same insurance. Public Liability is the name used in the UK and mostly used in the Commonwealth countries, whilst General Liability is the name used in the US. You will see these terminologies used interchangeably depending on who is talking about it. In Singapore, we commonly refer to this insurance as Public Liability. However to make things more confusing, American insurers based in Singapore will refer to it as General Liability.
The important thing to note is that the coverage is exactly the same. The insurance covers any accidental property damage or bodily injury (including death) claims made against your company. It however does not include claims of bodily injury or death to your own employees. That is covered under the Work Injury Compensation Act in Singapore, and is a separate insurance policy. Public / General Liability insurance protects you from third-party claims.
When is this policy useful?
If you are a tenant, most likely your tenancy agreement will require you to take out a Public Liability policy. This is because your landlord will want to claim against you and your employees in case of damages to the rented space. Also, if a third-party gets injured on the property, your landlord will want your Public Liability policy to pick up the claim rather than theirs. Some landlords may even request to be included as an additional insured party on your insurance policy.
If you are participating in a conference or exhibition where you will be setting up a booth to showcase your company, the event organisers will also likely ask you to take out a Public Liability policy for the same reasons as above, so that any accidents will be claimed under your own policy instead of theirs.
Companies that require its employees to visit clients, partners, suppliers etc on site have the added risk for things going wrong when outside the office. In situations such as this, it is important to make sure your policy covers your company Singapore-wide and not just at your office location. It is also possible to get worldwide coverage, especially when companies do business abroad, but this obviously comes with additional premium.
What is CGL insurance?
This is more confusing as the acronym CGL can stand for several things; Commercial General Liability, Comprehensive General Liability or Combined General Liability. However the insurer calls it, you can think of CGL insurance as the next level up from Public / General Liability policies.
CGL policies include the same things as a Public / General Liability policy, but will typically have other coverages included. This varies from insurer to insurer, but generally speaking it can include:
Advertising liability: for lawsuits due to libel, slander or copyright infringement in advertising.
Pollution liability: claims of bodily injury and property damage resulting from pollution created by the company.
Products liability: covering bodily injury and property damage claims as a direct result from the company’s completed products. This could be due to a design, label or manufacturing defect.
Motor liability: Property damage and bodily injury claims sustained by a third party because of the use of a motor vehicle in the course of performing business duties.
Not all CGL policies will include all these extras, so you need to read through the policy wording to be sure of what you are getting coverage for.
It is quite common when setting up contracts with enterprise clients that they request you take out some form of a Liability policy. They may specify the need for a CGL policy including the minimum policy limit and the exact coverages. You will need to be careful that the quotes you get covers you exactly for those requirements. There may be cases where a Public / General Liability policy is sufficient to meet your client’s requirements.
Event Liability insurance
If your company is involved in organising events such as conferences, exhibitions or conventions, insurers will likely prefer you to take out Event Liability insurance rather than a Public Liability insurance. An Event Liability policy will cover you for property damage and bodily injury claims, but will also provide compensation for event cancellation where you receive a pay out in case the event is cancelled due to fire, flood etc. It can be taken out on a per event, or an annual basis.
Forging ahead with business activities is great news all around. We just need to make sure we have the right protection in place to prevent any unnecessary headaches and unexpected dips to the cash flow. Get in touch with us if you have any questions or specific liability insurance requirements that you need help with.
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