Presentation on

Commercial General Liability

By Namita Rohra
Segment Head : Liability and Specialty
Lines
Understanding the background of the client

Hindalco Industries Limited is the industry leader in aluminium and copper

manufacturing. Hindalco operates 47 units in 10 countries with an employee
workforce of 40,000+.

Domestic Operations:

In India, Hindalco has presence in Uttar Pradesh . The facility operates across
the aluminum value chain from bauxite mining, alumina refining, aluminium
smelting to downstream rolling and extrusions. Other operations in the country
are in Jharkhand, West Bengal, Orissa, Kerala, Maharashtra, Karnataka and
Gujrat

Hindalco also operates captive bauxite mines in Jharkhand, Chhattisgarh,

Maharashtra and Orissa

Hindalco also has two research and development centres in Belagavi and
Taloja.
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 Operations in different countries

Operations abroad:

Novelis Inc.

Novelis is a subsidiary of Hindalco Industries Limited, acquired in 2007. It is

headquartered in Atlanta, Georgia and operates 33 manufacturing facilities in
nine countries across North America, South America, Europe and Asia. Novelis
is the leading producer of flat-rolled aluminum products and the world's largest
recycler of aluminum.

Hindalco-Almex Aerospace

Hindalco-Almex Aerospace Limited with its plant located in Aurangabad,

manufactures high-strength aluminium alloys for applications in the aerospace,
sporting goods and surface transport industries. It is joint venture between
Hindalco and Almex Aerospace, which has been in operation since 2008.

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Public Liability Insurance vs
Commercial General Liability
 Public Liability Insurance vs Commercial General
Liability Insurance
Public Liability Insurance (PLI) is designed to protect business owners and their assets
against losses associated with injury, property loss or damage, and other losses incurred
by members of the public and/or third parties while on the business premises. PLI is
considered as the starting point for most businesses, especially those that are retail- or
public access-oriented. PLI policies provide a minimum amount of liability coverage
such as liabilities against public claims of accidents, negligence, and injury.

Commercial General Liability Insurance (CGL) is designed to protect against liabilities

arising from defective products, workplace accidents, ngligence, and injuries incurred
by third-parties such as visitors to a business or its customers. A CGL policy may also
cover payments for medical and legal expenses. can provide c

Obtaining a CL policy provides business with additional insurance cover including

protection of the company’s assets in case of a catastrophic event in comparison to a
public liability which covers liabilities stemming from public claims.

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Commercial General Liability
 What is Commercial General Liability

The Commercial General Liability policy is the ideal policy for organizations that
are proactive in their approach towards liability issues. It is accepted the world
over as the complete policy to provide seamless protection to the Insured, and
covers third-party Liabilities arising from various business exposures such as
those arising from:

- Premises,
- Products and Completed Operations,
- Advertising and Personal Injury,

thus ensuring complete protection to the insured against liability issues.

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Commercial General Liability

Covers Legal Liability exposures arising out of business i.e. premises and operations, and products and
completed operations.

Broad based wording provides comprehensive protection against:

- Coverage A : Bodily Injury & Property Damage

- Coverage B : Personal & Advertising Injury
- Coverage C : Medical Payments

Provides various Supplementary Covers in the standard wording.

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CGL Policy Structure
Cover Description
Coverage A Policy pays those sums that the insured becomes legally obligated to pay as damages because of third party
Bodily Injury and Property Damage • Bodily Injury
• Property Damage
Arising out of : your product or your work

Coverage B
Personal and Advertising Injury
Policy pays those sums that the insured becomes legally obligated to pay as damages because of “personal injury” or
“advertising injury” :
1.Personal injury caused by an offense arising out of your business, excluding advertising, publishing, broadcasting or
telecasting done by or for you;
2.Advertising injury caused by an offense committed in the course of advertising your goods, products or services;

Coverage C Medical expenses are payable for bodily injury caused by an accident:
Medical Expenses Cover (1) On premises you own or rent;
(2) On ways next to premises you own or rent; or
(3) Because of your operations
• Payments made regardless of fault
• No deductible applies to Medical Expenses

• Expenses incurred by Insured to assist in settlement of claim

Supplementary Payments
• Costs awarded against Insured
• Cost of bail bonds
• Pre-judgment Interest
• Post-judgment Interest
• Expenses Incurred by Insurer
These payments do not reduce the Limit of Insurance

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CGL Policy Forms

Claims Made Form:

A policy providing coverage that is triggered when a claim is made against the insured
during the policy period, provided the wrongful act that gave rise to the claim took place on
or after the retroactive date as mentioned in the policy.

A retroactive date is the date from which you have held uninterrupted insurance cover. And
its purpose is to exclude claims arising from any work undertaken prior to date shown.

Occurrence Form:
A policy covering claims that arise out of damage or injury that took place during the policy
period, regardless of when claims are made.

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Important Terminologies

Bodily Injury : “Bodily injury” means bodily injury, sickness, or disease sustained by a
person, including death resulting from any of these at any time.

Property Damage : “Property damage” means:

a. Physical injury to tangible property, including all resulting loss of use of that property. All
such loss of use shall be deemed to occur at the time of the physical injury that caused it; or
b. Loss of use of tangible property that is not physically injured. All such loss of use shall be
deemed to occur at the time of the “occurrence” that caused it.

Advertising injury” means injury arising out of one or more of the following offenses:
a. Oral or written publication of material that slanders or libels a person or organization or
disparages a person’s or organization’s goods, products or services;
b. Oral or written publication of material that violates a person’s right of privacy;
c. Misappropriation of advertising ideas or style of doing business; or
d. Infringement of copyright, title, or slogan.

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Important Terminologies

“Personal injury” means injury, other than “bodily injury,” arising out of one or more of the
following offenses:
a. False arrest, detention or imprisonment;
b. Malicious prosecution;
c. The wrongful eviction from, wrongful entry into, or invasion of the right of private
occupancy of a room, dwelling, or premises that a person occupies by or on behalf of its
owner, landlord, or lessor;
d. Oral or written publication of material that slander or libels a person or organization or
disparages a person’s or organization’s goods, products or services; or
e. Oral or written publication of material that violates a person’s right of privacy.

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Policy Extensions

 AOG Perils cover- This extension aims at protecting the interest of the insured from acts
beyond his control and are result of a natural calamity.

 72 Hours Sudden and Accidental Pollution Coverage- Usually coverage is not extended for
claims pertaining to bodily injury and property damage, arising out of discharge, dispersal
etc. of any pollutants. However, limited coverage for a period of 72 hours is provided
calculated from the time of such leakage or discharge.

 Lift Extension- this extension is sought where there are lifts installed in the building for
benefit and utility of the public at large.

 Food and Beverages extension- In case the premises being covered are supplying any form
of food & beverages, then any liability arising from consumption of such service can be
covered under CGL policy under this extension

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Policy Extensions

 Terrorism Legal Liability Coverage- Provides coverage for third-party liability claims
emanating from acts of terrorism

 Coverage of carriage of treated effluents through pipelines- This extension protects the
policyholder/insured from accidents directly caused by treated effluents being carried by
pipeline outside the premises to the discharging points

 Personal Property under Care, Custody and Control Coverage- company is responsible for
third party property on their premises, or in their care/control. If the property is lost, stolen,
damaged, affected by fire or smoke etc., the owner can claim under the insured's general
Liability policy for the value of repair or replacement

 Transportation Extension- this extension provides coverage against third party liability
arising due to insured’s material while being transported

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Policy Extensions

 Liability arising out of travel of executives of Indian Insured anywhere in the world for
non manual business visits

 Additional Insured Endorsement where required by the written contract- An additional

insured endorsement is the contract by which an additional insured (a person or entity,
other than the named insured) is protected for claims which may be levied against him due
to the acts of the named insured

 Batch Clause- This clause provides that all claims arising out of defective products
produced in a single manufacturing run (or batch) shall be treated as a single claim.

 Vicarious liability for Contractor and Sub-Contractor- Vicarious liability can result from
the acts of independent agents, independent contractors etc. while working on behalf of the
insured person

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 Pollution Legal Liability Insurance

16 Private and Confidential

Pollution Legal Liability
 Organizations that deal with hazardous substances face the risk of legal liabilities arising
out of emission, discharge, release, or escape of any contaminants, irritants, or pollutants
into or on land, the atmosphere, or any water course or body of water, which may result in
environmental damage.

 Pollution Legal Liability Insurance, also known as environmental legal liability insurance
policy pays on behalf of the Insured, the sums the Insured is legally obligated to pay as a
result of emission, discharge, release, or escape of any contaminants, irritants, or pollutants
into or on land, the atmosphere, or any water course or body of water, which results in
environmental damage.

 Pollution Legal Liability Insurance offers broad environmental coverage, which can
includes own site clean up costs, off site clean up costs, third party bodily injury claim
from pollution condition, business interruption cost, transportation cost, emergency cost

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Advantages
The Pollution Legal Liability policy operates in the way that ir covers both progressive and
sudden pollution. In particular:
 Damages to third parties (bodily injury and property damages)

 Damages from interruption of activity

 Remediation costs, securing of the area and removal and restoration of damage, both inside
and outside the insured premises.
 Public relations and communications expenses (often entrusted to public relations
consultants or similar agencies)
 This policy can be tailor-made to suit the requirements of the policyholders

 Some insurance policies include coverage for both pre-existing and new losses
 Safeguards the insured from penalties which might be incurred due to government rules
and regulations
 Safeguards the policyholders from unknown environmental liabilities which result from
asset transactions
 Improves the reputation of the organisation; public and media are highly sensitive to
incidents caused due to pollution
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Sterlite Copper Case

Sterlite Copper’s plant in Thoothukudi, Tamil Nadu was shut down in May 2018 by the
Tamil Nadu government after the state pollution control board’s recommendations. The
order was passed after the residents protested that the plant was posing a health hazard to
those living in the area. The residents had complained to the authorities about health issues-
coughing, headache, choking etc. due to the smoke emanating from the plant. In addition,
there were also allegations of contamination of water bodies around the plant due to toxic
discharge from the plant.

Private and Confidential 19

 Consumer Protection Act

20 Private and Confidential

Consumer Protection Act 2019 : Coverage under CGL
Insurance
Product • False or
manufacturer or misleading
seller have the Advertising
liability to advertisement injury covers
compensate for Product & libel & slander
any harm caused
to consumer, by
Completed and
defective product Operations disparagement
manufactured or
sold.
The Central Authority has
the power to ask for recall
of goods which are
Liability for failure dangerous, hazardous or
to give adequate unsafe. Covered under
instruction of
Government Recall
correct usage or
warning Extension
regarding Providing of or
improper usage failure to provide
warning or
instructions is
covered
Slide 5
Key changes made in the New Consumer Protection
Act, 2019
PARTICULARS CPA, 1986 CPA, 2019

E-COMMERCE No specific clause for e-commerce Section 94 talks about measures that
Central Government mat take as it deems
fir to prevent unfair trade practices in e-
commerce.
AUTHORITY District Consumer Forum, State District Commission, National
Consumer Forum and National Commission, National Commission and
Commission Dispute Redressed Forum.
PECUNIARY 1. District Forum- claim upto Rs. 20 1. District Commission- claim up to Rs. 1
JURISDICTION lkh cr
2. State Forum- claim from Rs. 20 lkh 2. State Commission- claim from Rs. 1 cr to
to 1 crore 10 cr
3.National Commission- claim over 3. National Commission- claims over Rs.
Rs. 1 cr 10cr
TERRITORIAL Where the seller/service provider/ Where either of the party stays/resides or
JURISDICTION manufacturer stays or resides or carries business
operates its business from.
UNFAIR TERMS AND No such provisions U/s 49(2) and 59(2) gives authority to the
CONDITIONS state as well as national commission to
(CONTRACT) declare any terms of contract to be nul and
void
REGULATOR No such provision Central Consumer Protection Authority
(CCPA)
ALTERNATE DISPUTE No such provisions According to section 80, the court can refer
RESOLUTION settlement through Mediation

MRP/PURCHASE PRICE MRP was the basis on which the In the new act both the discounted price
pecuniary jurisdiction was established and the actual price are considered to
determine the pecuniary jurisdiction.

APPEAL 1. To State Commission- 30 Days 1. To State Commission- 45 Days (Section

2. To National Commission- 30 days 41)
3. Deposit- 50% or 25,000 whichever is 2. To National Commission- 30days (Section
less 51)
3. Deposit- 50% of compensation awarded
REVIEW Earlier the Disctric Commission Forum In the new act, DCF has the power to
did not have the authority to review review
COMPOSITION OF President of India and 2 other members President and 4 other members
NTIONAL COMMISSION
Consumer Protection Act 2019 : Coverage under
CGL Insurance
Product • False or
manufacturer or misleading
seller have the Advertising
liability to advertisement injury covers
compensate for Product & libel & slander
any harm caused
to consumer, by
Completed and
defective product Operations disparagement
manufactured or
sold.
The Central Authority has
the power to ask for recall
of goods which are
Liability for failure dangerous, hazardous or
to give adequate unsafe. Covered under
instruction of
Government Recall
correct usage or
warning Extension
regarding Providing of or
improper usage failure to provide
warning or
instructions is
covered
Slide 5
 Product Recall – Case Studies

25 Private and Confidential

Product Liability

C) Implications:
If the central authority is satisfied with the evidences to
establish violation of consumer rights-
• Pass order to recall the good/product
• Reimbursement of price of product/service that has been
recalled
• Discontinuation of practice
Product Recall
WHY THE PRODUCTS GETS RECALLED? 1. Voluntarary Recall
2. If Central Consumer Protection
Authority (CCPA) deems fit

RECENT PRODUCT RECALLS 1. Fitbit Smart watches (2022) recalled globally over burn
injuries due to overheating. Over 1.6 million Fitbit Ionic
smart watches were sold globally.
2.Belkin 2-in-1 wireless charger (2021) sold by Apple
recalled due to fire hazards, manufacturing defect that can
lead to overheating, fire, and shock hazards. A full refund will
be given to all purchasers, as per the company.
3.MG Motors India (Aug, 2021)are set to recall 14,000
units of BS6 Hector as it failed the Conformity of
Production test (CoP) at the International Centre for
Automotive Technology (ICAT) in Manesar, Haryana.