Liability Insurance
There are several types of Liability Insurance covers available in India and overseas.
In a broad perspective such Insurances are designed to indemnify the Insured Company/Individual against their legal liability to pay compensations TO THIRD PARTIES. It also covers the costs of defending the case including claimant's costs, fees and expenses in respect of injury/damage arising out of accidents/negligence during their business operations.
Only civil liabilities are covered. The policies offers the benefit of Retroactive period on continuous renewal of policy whereby claims reported in subsequent renewal but pertaining to earlier period after first inception of the policy, could also be considered under the Policy. Since the legal liabilities could arise from different circumstances – different policies are also available which are described here under.
Commercial General Liability
Directors & Officers
Errors & Omissions
Product
Professional
Public Liability
Workmen Compensation
Commercial General Liability (CGL)
COVER - this is an ideal policy providing a seamless protection to the Insured for its various legal liabilities. It covers third party liability arising from various business exposures such as – Operations on premises, Product and Completed Operations, Advertising and Personal Injury (legal claims brought on account of libel/slander, wrongful eviction or detention on the premises). Many Insurance Companies extending such a cover practically take over the entire handling of the defence of the suit should one arise and assist in bringing it to a logical conclusion by proceedings.
CUSTOMERS
Indian Companies having global operations, Exporters who are exposed to claims from overseas consumers and even Foreign Companies with a CGL Policy in other Jurisdictions looking to extend their Indian operations would find this to be a very useful cover.
Directors & Officers Liability Insurance
COVER - this policy covers the Legal liability of Directors and Officers of Companies holding positions of trust and responsibility to pay damages to shareholders, employees, creditors, etc., of the company for wrongful acts committed by them in the supervision and management of the affairs of the company.
In general it covers the personal liability of Directors and Officers arising due to wrongful acts in their managerial capacity. Defence costs are also covered and are payable in advance of final judgment.
General Exclusions to the policy are dishonest fraudulent criminal or malicious act, Personal guarantee, Libel and slander and damage to property, Pollution damage and Violation of any Law.
CUSTOMERS
More and more Indian Companies are beginning to look to protect their Directors and Officers (former, present and future members of the Board of Directors) from exposures arising out of compliance with various statutes. Directors have highly demanding legal obligations to uphold. Further, even independent and nominee directors are held to be equally accountable to stakeholders.
Also, as Indian companies foray into the global marketplace to sell their products and services or to mobilize capital, they need to purchase D&O insurance to secure protection from overseas exposures.
Errors & Omissions Liability Insurance/Professional Indemnity
COVER - this policy is meant for professionals to cover the LEGAL liability falling on them as a result of negligent acts, errors and omissions in the performance of professional service.
The policy is meant to pay both for defence expenses and damages and includes amounts that the insured is legally required to pay because of judgments, arbitration awards or the like rendered against the insured, or for settlements negotiated in accordance with the coverage afforded by the policy.
The cover will be operative only for the works executed in the policy period. Liability for bodily injury and property damage claims do not fall under this insurance (a separate Public Liability policy would be required)
CUSTOMERS
Professionals such as Doctors, medical practitioners, Engineers, Architects, Lawyers, Advocates, Chartered Accountants and Medical Establishments can avail of such covers.
Group Policies with group discounts on premium can also be arranged.
Customised Policies for sophisticated and special liabilities relating to Companies such as IT, BPOs, Media Companies, Consultants and Law firms can also be arranged.
Product
Scope of Cover
This insurance suitable for any manufacturing or industrial organization, covers Legal liability arising out of accidents due to any defects in the products sold or supplied by the Insured Legal costs, fees and expenses incurred with the prior consent of the Company.
Extensions
Exports to North America
Vendors extension clause
Exclusions
Cost, repair or replacement of allegedly defective product
Product recall
Contractual agreement liability
Any product, which is intended for incorporation into any aircraft
Financial loss or loss of goodwill
Deliberate, willful, international non-compliance of statutory provisions
Any product guarantee
Fines, penalties, punitive or exemplary damage
War and nuclear perils
Public Liability
COVER - offers cover for third party liabilities (Bodily Injury / Property Damage) arising out accidents on (all) the premises occupied by the Insured and legal costs incurred in connection therewith. The policy can be extended to cover similar liabilities arising out of Accidental Pollution, Act of God Perils, Transportation of Hazardous Substances, Carriage of treated effluents etc.
Depending upon your nature of operations the following Public Liability Insurance Policies are available
- Public Liability Industrial Risks- Manufacturing Units
- Public Liability Non Industrial Risks- Non Manufacturing entities like IT Companies, BPOs, Hotels, Schools, Restaurants and Clubs, Hospitals
- Public Liability Act- For all business units handling hazardous substances as per Public Liability Act, 1991 that are to compulsorily take this insurance cover
- (In addition to the Act Cover one can take the Public Liability (Industrial or Non Industrial) to cover the additional liabilities over and above the ACT prescribed amounts)
CUSTOMERS
Industrial and Non Industrial Organisations – anyone exposed to Third Party Liabilities.
Workmen Compensation
Scope of Cover
This insurance covers legal liability of employees under the Workmen's Compensation Act 1923 (amended), Indian Fatal Accidents Act 1855 and at Common Law. The cover includes all costs and expenses incurred by the insureds with the Insurance Company's consent in defending any claim for compensation preferred under any of these Acts.
The Indian Workmen's Compensation Act 1923 provides for the payment of Compensation by the employee to his employees (for their dependents in the event of fatal accidents) if personal injury is caused to them by accidents arising out of and in the course of their employment.
According to the Workmen's Compensation (Amendment) Act 2000, the maximum sum payable is:
Fatal injury - Rs. 457,080.00
Permanent Total Disablement - 548,496.00
Permanent Partial Disablement - depending on the extent of incapacity
Temporary Disablement - Half-monthly compensation
Optional Extension
There is provision to cover certain disease mentioned in part "C" of schedule III of Workmen's Compensation Act.
Exclusion
The insurance does not cover any interest or penalty, which may be imposed on insured for failure to comply with the requirement of the Workmen's Compensation Act 1923, as amended.