Liability Insurance

Liability insurance

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Cyber insurance is an insurance product designed to protect the businesses against the potentially devastating effects of cybercrimes such as malware, ransomware, distributed denial-of-service (DDoS) attacks, theft or loss of data, Breach of privacy or data or any other method used to compromise a network and sensitive data.

This policy also refer to as cyber risk insurance or cyber security insurance, these products are personalized to help a company mitigate specific risks.

Do I need cyber insurance?

What does cyber insurance cover?

Most cyber insurance plans cover a broad range of cyber risk losses that may unexpectedly arise from cyber attacks. In addition, some plans can offer coverage for physical damage to hardware or coverage for business income loss. Plans can be personalized depending on your current business security posture.

Cyber liability insurance policies typically include coverage for:

Professional indemnity insurance/ Error & omission policy

Professional Indemnity/ Errors and Omissions Insurance cover provides protection for the individual professionals/ company and its subsidiaries for claims brought in respect of negligent acts, errors or omissions in the performance of professional services. The policy is meant to pay 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.

Do I need professional indemnity insurance?

You are likely to need professional indemnity insurance if:

Professions that might need professional indemnity insurance include (but are not limited to):

Management and business consultants such as marketing consultants, training consultants and education consultants

Typical coverage’s under the Professional indemnity insurance/ Error & omission policy

Director’s & officer’s liability insurance

Directors and officers (D&O) liability insurance protects the personal assets of corporate directors and officers, and their spouses, in the event they are personally sued by employees, vendors, competitors, investors, customers, or other parties, for actual or alleged wrongful acts in managing a company.

Defence costs are also covered and are payable in advance of final judgment. This policy provides protection for claims brought against directors, officers and employees for actual or alleged breach of duty, neglect, misstatements or errors in their managerial capacity.

Directors and officers are sued for a variety of reasons related to their company roles, including:

Illegal acts or illegal profits are generally not covered under D&O insurance.

Who is Covered ?

The cover applies to former, present and future board of Directors and the Management including employee’s . Cover will apply to above individuals of parent company , the subsidiary companies ( depending on the definition ) and subsidiary companies acquired or incorporated during the policy period. (It should be noted that outside directors, public representative or shadow directors might also required the cover)

Key Coverage’s under this policy

A commercial crime insurance is a policy which offers comprehensive cover and provides protection to organizations from losses from business-related crime. Protection through the policy can cover cash, assets, merchandise or other property loss when someone perpetrates fraud, embezzlement, forgery, misrepresentation, robbery, employee dishonesty, theft or any other type of business-related crime on the company.

In recent times, corporate fraud has grown in conjunction with the expansion of legitimate Internet use. Symptoms of fraud include accounting anomalies, lack of internal control environment, lifestyle and behavior. It also impacts on accounting transactions in accounts receivable, receipts and disbursements, accounts payable, inventories and fixed assets, and financial reporting. Incidents of fraud in organizations wipe off the fund base of the company and small frauds such as alterations in the securities; theft of property reduces the profit of the company.

What does Commercial Crime Insurance Cover?

Commercial Crime Insurance generally includes coverage for the following items:

Additional coverage’s are also available for an extra premium, such as:

Exclusions from Commercial Crime Insurance

Commercial Crime Insurance does not cover the following:

Examples of Commercial Crime Insurance Claims

Discovery and Loss Sustained Basis

A Commercial General Liability (CGL) policy protects your business from financial loss should you be liable for Bodily injury (BI) property damage or personal and advertising injury caused by your services, business operations or your employees. It covers non-professional negligent acts

What commercial general liability insurance covers

A CGL insurance policy will usually cover the costs of your legal defense and will pay on your behalf all damages if you are found liable-up to the limits of your policy. CGL coverage is one of the most important insurance products, due to the negative impact that a lawsuit can have on a business and because such liability suits happen so frequently. Standard CGL includes:

Coverage A: Bodily Injury and Property Damage Liability

Bodily injury and property damage coverage provides protection against losses from the legal liability of insureds for bodily injury or property damage to others arising out of non-professional negligent acts or for liability arising out of their premises or business operations. Mental injuries and emotional distress can be considered bodily injuries, even in the absence of physical bodily harm.

Workers compensation and employment practices liability insurance are excluded but can be purchased as separate policies. In addition, pollution liability is excluded and can be purchased as an endorsement. However, this coverage is very limited, and high-risk businesses should consider purchasing a separate pollution liability policy. Liquor liability, professional liability and other risks may also be excluded. An insurance professional can help you to determine endorsements that are right for your type of business.

Coverage B: Personal and Advertising Injury

Personal and advertising injury liability protects an insured against liability arising out of certain offenses, such as:

Coverage C: Medical Payments

Limited coverage for medical payments includes payments for injuries sustained by a non-employee caused by an accident that takes place on the insured’s premises or when exposed to the insured’s business operations. Medical payments coverage can be triggered without legal action. This provides for prompt settlement of smaller medical claims without litigation. It is included in the CGL policy and pays for all necessary and reasonable medical, surgical, ambulance, hospital, professional nursing and funeral expenses for a person injured or killed in an accident taking place at the insured’s premises or arising from business operations. There is no defense or legal liability coverage-as there is with bodily injury and property damage (Coverage A) and personal and advertising liability (Coverage B) – since coverage is provided on a no-fault basis.

Purchasing commercial general liability insurance

You can purchase commercial general liability insurance as a stand-alone policy, as part of a Business Owners Policy (BOP) or as part of a Commercial Package Policy (CPP). Consult with your insurance professional about what type of coverage you need and how much. If your general liability policy, BOP or CPP do not provide sufficient coverage, you may want to consider purchasing a commercial excess (umbrella) policy, which will provide additional protection.

Additional liability coverages to consider

Depending on your type of business, you may want to consider additional liability coverage that is not part of commercial general liability insurance. Talk with your insurance professional, risk manager and/or legal counsel regarding the types of coverages that you may need

Special Considerations

Depending on its business needs, a company may need to name other companies or persons as additional insured under their commercial liability insurance policy. This is common when businesses enter into a contract with another entity that requires the insuring business to name the additional entity as additional insured on the policy. For example, if an automobile repair garage enters into a contract with ABC Co. to provide cleaning services for their facility, ABC Co. may require the garage owners to add ABC Co. as additional insured on their commercial general liability coverage.

Product liability insurance protects a company against claims or suits arising from the company’s products, whether they were made by the company or sold by them. This form of insurance covers a manufacturer’s or seller’s liability for bodily injury or property damage sustained by a third party due to a product’s defect or malfunction. The product may be virtually any type of good sold to businesses or the public, like machines, food, medicines, and clothing. The injured third party may be a buyer or user of the product or even a bystander.

Situations that are typically covered by Product Liability Insurance may include:

Product Liability Insurance makes sense to consider for any financially responsible business owner. When you put your products in the hands of your customers, you never know what may happen. Product Liability Insurance gives you the peace of mind that if anything were to occur, you would have a formidable safety net to fall back upon.

Some examples of small businesses that could use Product Liability Insurance are:

What are the Types of Claims Product Liability Insurance Can Protect Against?

There are different types of claims that a dissatisfied customer may claim against your company, Some of the more common claims include:

1. Design Defect
A design defect claim alleges that a product was unsafe or dangerous from the conception of its design. This differs from a production or manufacturing flaw in that the cause for harm was not born out of faulty craftsmanship or production, but the product’s inherent design was dangerous in and of itself.

For example, a customer purchases a children’s book that contains some beads on one of the pages. Due to the small size of the beads, the customer’s child chokes on the bead. Although a claim could be made for production or manufacturing flaw, the customer could also claim that the children’s book was inherently dangerous from its design. I.e., a children’s toy should not contain any small material that a child could choke on.

2. Production or Manufacturing Flaw
As its name implies, this type of claim alleges a flaw in the production or manufacturing of merchandise that created a dangerous or unsafe product. Production or manufacturing flaws are any mistakes that occur during the production of the product that creates a potential cause for bodily injury, property damage, or consequential economic loss.

For example, a customer who had purchased a pair of shoes from your business recently slipped and hurt herself due to the heel not being securely fastened to the sole of the shoe. She incurs medical costs because of her injury and has sued you for producing a shoe that was unsafe for normal wear.

Without Product Liability Insurance, your business would be solely responsible for fronting all the legal and court costs to fight this claim. Furthermore, if the customer were to win the case, depending on the outcome of the claim, your business might also be liable for the customer’s legal costs and medical costs.

3. Misleading/Defective Warnings or Instructions (Marketing Defect)

A customer may seek action against your company for not supplying the necessary warnings regarding dangerous aspects of your product. The claim here is that a company did not adequately and appropriately notify the consumer of all the potential obvious risks and harm that the product may cause.

For example, your business sells homemade natural cosmetics. A customer purchases one of your ointments that contains many harsh ingredients that should not be applied to sensitive areas of the face. She puts the ointment on her eyelids and suffers severe chemical scarring. Because your company did not warn the customer or properly instruct her, a claim may be made against you for defective or misleading warnings or instructions.

Public Liability Insurance offers cover for third party liabilities (Bodily Injury / Property Damage) arising out of the premises and operations of the Insured and legal costs incurred in connection therewith.

Types of public liability insurance

  • Public liability industrial – For manufacturing ,Godowns & warehouses
  • Public liability Non-Industrial – for School, Resturants, BPOs, IT firms ,Offices ,Hotels etc
  • Public liability act – For all business units handling hazardous substances as per Public Liability Act, 1991 and the rules framed there under.

Public liability insurance coverage

The policy provides cover against  Legal liability to pay compensation to the third party in respect of bodily injury and/or property damage, suffered by them, arising out of the accidents occurring in your premises.

It also covers the legal cost and expenses incurred in defence within the limit of indemnity

  • Add On Covers
  • Act of God perils extension
  • Transportation liability extension
  • Sudden and accidental pollution extension
  • Food & beverages liability extension Lift, elevator or escalator liability extension Coverage for other facilities like swimming pool, health club etc


Kidnap and ransom (K&R ) insurance is a specialty crime coverage that protects against financial losses that arise when an insured is threatened with kidnap, extortion or illegal detention domestically or abroad.

Insurance brokerage HUB International reports there are about 15,000 kidnap and ransom incidents around the world every year, leading to about half a billion American dollars in ransoms paid to criminals and their causes.

K & R Coverage’s

K&R insurance policies typically cover the perils of kidnap, extortion, wrongful detention, and hijacking.

K&R policies are indemnity policies – they reimburse a loss incurred by the insured. The policies do not pay ransoms on the behalf of the insured. Typically, the insured must first pay the ransom, thus incurring the loss, and then seek reimbursement under the policy.

Losses typically reimbursed by K&R insurance include:

The policies also typically pay for the fees and expenses of crisis management consultants. These consultants provide advice to the insured on how to best respond to the incident. Even the most basic training for people traveling to dangerous places is not easily provided or is not obtained by small to mid-sized companies.

Public Offering of Securities Insurance (POSI) policy protects a company and its directors against liabilities arising from offering the company’s securities for sale and listing on a public stock exchange.

Publishing an offer document and creating marketing presentations, when offering a company’s securities for sale open up the company and its directors to the risk of litigation if the securities’ performance is not in line with expectations.

Why take a POSI policy?

Key Coverage’s:

Key Exclusions:

Raising capital in a risky world

Investors and analysts have always scrutinized the prospectuses of companies raising capital for Stock exchange listings, mergers, expansions, etc. The scrutiny does not stop once the transaction has been completed. Shareholders and investors want to know how well their money has been invested and that also in an unforgiving environment.

The need for specialist insurance protection for issuers of securities has never been greater, and yet an alarming number of public offerings go ahead without suitable protection for the issuing company and its directors, officers and employees.

Who can buy a POSI policy?

POSI is designed for any company that is raising capital through the publication of a prospectus. It can provide cover for introductory offerings (IPO), secondary offerings and can also cover private placements.

The POSI policy covers to the company and its directors, officers and employees for securities claims brought against them in connection with the offering.

Research organizations or Manufacturer particularly Pharmaceuticals manufacturer carrying out clinical trials , face the risk of legal liability to pay research subjects (Participants / Patients ) for the death, bodily injury, physical or mental illness, disease or impairment caused due to the research or new medicines.

Clinical Trial Liability Insurance (CTLI) provides cover against legal liability arising out of lack of care, negligence resulting in injury or death of the subject. Insufficient/improper disclosure and conflict of interest may also become subject matter of suit.

Clinical Trials are vital and important for finding new, better & more effective Medicine. Whenever any new medicine/therapy is to be launched, it must first be tested in lab on animal or human cell. If the results are encouraging than it is tested on human being. India has now become a favourable destination for clinical Trials because of availability of expertise , infrastructure, availability of patient /research subject, low cost.

Scope of Cover

The Clinical Trials Insurance policy covers legal liability arising out of :

Some of the other highlights of the policy are:

The following are excluded under the policy and are not covered:

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