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Liability Insurance

Liability Insurance

In today’s dynamic business environment, an organisation is vulnerable to a variety of risks. Several parties can make claims against a business, right from a customer to an employee. Such claims can make a business suffer a catastrophic loss, restrict the cash flow and disturb its daily functioning.

Liability insurance is a policy that offers protection to businesses and individuals from risk that they may be held legally or sued for negligence, malpractice or injury. This insurance policy protects the insured from legal payouts and costs for which the policyholder is deemed to be responsible.

Public Liability

Public Liability Insurance offers the optimum protection to the business in case any third-party liability arising out of injury or property damage. Public exposure or liability affected by law can destroy the promising future of any business. With this insurance policy, you can mitigate the financial burden that may arise due to third-party liabilities, for this reason, it can also be called third-party liability insurance. It is commonly known as Commercial General Liability Insurance as well, which works as a combination of both Product Liability and Public Liability insurance policies.

Features & Benefits

Public liability insurance in India is specially designed for the companies or individuals who may be held liable or legally responsible to pay for the injury or other related damages caused to a third party. It is recommended for professional organizations like hospitals, BPOs, doctors, and even business owners.

You can protect your business from unforeseen events by purchasing a public liability insurance policy that comes with the following benefits:

  • Bodily Injury

  • Property Damage

  • Personal Injury

  • Liability Arising out of Advertising Rights

  • Contractual and Tenant’s Liability

  • Lawsuits, Investigations and Settlements 


The policy covers the following eventualities:

  • Lawsuits, Investigations, and Settlements: If your business is being sued for any damage caused to a third party, the insurer covers the expenses of investigating officer or lawyer.

  • Medical Expenses: In case of an injury to a third party attending your office, the medical expenses will be covered 

  • Damage or injury due to an accident in your premises or from your products, operations, or promotional advertisements leading to a third-party liability claim will be covered.

  • Liability arising due to damage to a third party’s property while visiting your office will be covered


The policy does not cover liability arising out of:

  • Earthquake, earth-tremor, volcanic eruption, flood, storm, tempest, typhoon, hurricanes, tornado, cyclone or other Similar convulsions of nature and atmospheric disturbance

  • Deliberate, willful or intentional non-compliance of any Statutory provision or disregard of the insured’s technical or administrative management

  • Loss of purely financial nature such as loss of goodwill, loss of market etc.

  • All personal injuries such as libel slander, false arrest, wrongful eviction/ detention, defamation etc., and resultant mental injury, anguish or shock

  • Infringement of plans, copyright, patent, trade name, trademark, or registered design

  • Fines, penalties, punitive or exemplary damages or any other damages

  • War group nuclear group and Act of God of perils

  • Transportation of materials and dangerous substances unless specifically covered

  • Ownership, possession or use by or on behalf of the insured of any aircraft, watercraft or hovercraft

  • Injury to any person under a contract of employment/apprenticeship, with the insured, when such injury arises out of the execution of contract

  • Arising under the Public Liability Insurance Act or any other statute that may come into force after the issue of this policy

  • Assumed by the insured by any agreement and which would not have attached in the absence of such agreement

Product Liability

The product liability insurance is crucial for companies whose products are widely used such as chemicals, tobacco, medical products, food, recreational products and others. It covers claims, which the insured becomes legally liable to pay to third parties as a result of bodily injury or property damage arising out of the use or consumption of products manufactured, sold and /or distributed by the insured.

Features and Benefits

The policy aids a product manufacturer, to deal with any legal obligations and third-party liabilities that might arise due to an accident — ensuring that the damage or bodily injuries caused to the third party are duly compensated. Its key features are:

  • Vendor’s Liability Extension

  • Cover for exports when domestic turnover is also covered.

  • Technical Collaborators Liability Extension

  • Coverage for defense cost incurred with prior consent

  • Benefit of Retroactive Date


  • The policy covers all sums (including defence costs) which the insured becomes legally liable to pay as damages as a consequence of:

    • Accidental death/bodily injury or disease to any third party

    • Accidental damage to property belonging to a third party

  • The defect in the product may be a manufacturing defect or may even be due to faulty packaging, delivery specifications or instructions as to use of the product.

  • Inappropriate usage of the product by the consumer due to absence of/ or wrong labels indicating usage precautions/warnings and warranties or representations made at any time with respect to the fitness, quality, durability or performance or use of “your product.”

  • The policy covers the sales turnover of the company- both domestic and/or exports.

However, the policy offers the benefit of retroactive date, i.e. a date stipulated in a claims-made Liability policy declarations section as the first date of incidents covered by the policy. The retroactive date is designed to provide coverage for claims resulting from incidents that take place before the current policy term.


  • Costs arising out of recall of any product

  • Deliberate, willful or intentional non-compliance of any statutory provision.

  • Arising out of pure financial loss

  • Arising out of fines, penalties, punitive and/or exemplary damages

Professional Indemnity

Professional service providers may become legally liable to pay for damages due to negligent act or errors & omissions during the discharge of their professional duties. While they may have to pay for awards of civil liability, there are additional costs of legal fees and legal expenses are also incurred to defend the claim. Notably, judicial activism is increasing than before thus making the professional service providers subject to greater litigation risks & actions on slightest of negligence or errors.


The policy is highly suitable for:

  • Lawyer and Law Firms

  • Architectures, Interior Designers and Companies

  • Chartered Accountants and Accounting Firms

  • IT Consultants and Companies

  • Consultants, Management Consultants, & Financial Advisors

  • Medical Practitioners

  • Surveyors and Valuers

  • Professionals and Professional bodies


It protects your business against claims for loss suffered by a client or a third-party due to errors made by you and are found to be negligent. The benefits are as follows:

  • Financial Protection from Lawsuits:

  • Peace of Mind

  • Increases Credibility of the organisation

  • Smooth running of your business

  • Increased chances of winning tenders


The scope and nature of cover varies with the profession: 

  • Medical professionals such as physicians, cardiologists, surgeons, and pathologists are given protection against legal liability claims made by the patients due to death or bodily injury. Defence cost is also included where the insured can add other consulting partners or doctors as well as assistants working under them. Lower grade employees like peons, housekeeping staff are also included, if the policy mentions, for errors, mistakes or omissions, negligence while performing a duty. 

  • On the other hand, engineers and architects are protected against any legal liability that arises out of any mistake with regards to delivering designs, for providing defective constructional designs, or causing death to the third party.

  • For lawyers and accountants, the coverage is given for any legal liability claim due to the monetary losses to clients arising out of omission or mistake made from the insured’s end or by his paid employees. For instance, if someone’s legal representative fails to present a paper regarding the case he is taking up behalf of the client, resulting in the loss of complete case, the attorney could be sued by his client under an omission claim.


This policy does not cover damage due to:

  • Intentional Damage

  • Illegal Acts

  • General Liabilities

  • Terrorism 

  • Contractual Liability

  • Employment Dispute

Directors and Officers Liability

The D&O policy provides cover for 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. 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.


  • In case an organization incurs any losses due to erroneous actions or decisions taken by the directors and officers in fulfilling their duties according to the memorandum and articles of association.

  • In case of losses resulting from claims filed against them by any wrongful act in their capacity.

  • With the written consent of the insurance provider, any legal expenses resulting from the prosecution of any director or officer for any examination, inquiry, investigation, or proceedings by the concerned authority.

  • Any expenses incurred by the shareholder of a corporation for pursuing a claim accusing any director or officer, and organization is lawfully obliged to pay as per the ruling of a court.

  • It provides indemnity to the legal heirs/legal representatives of the director or officer in case the director or officer becomes insolvent.


This policy covers former, present and future members of the board of directors, the management and any employee performing a managerial or supervisory role. It includes: 

  • Advancement of Defence costs

  • Advancement of Defence costs

  • Claims made principle: claims must be made during policy period

  • Right to defend cover

  • Cover for Subsidiaries

  • Outside Directorship coverage

  • Cover for Retired Directors

  • Employment Practice Liability (EPL) cover for directors and officers

  • Cover for failure / negligence to supervise against any Professional Indemnity related claims

  • Cover for Regulatory Crisis Response

  • Cover for Assets and Liberty Costs including prosecution, bail bond and civil bond expenses

  • Cover for damage to reputation

  • Cover for Heirs, Estates and Legal Representatives

  • Bilateral Discovery Period

  • Emergency Costs cover

  • Kidnap response cover

  • Special excess protection for non executive directors

  • Cover for pollution related claims for defence costs and shareholder claims

  • Insured vs Insured (defence cost cover)

  • Severability: non-guilty insured is covered


  • Fines and penalties and claims for seepage or pollution.

  • Excluded territories/jurisdiction.

  • Claims for bodily injury, property damage.

  • Known acts prior to inception.

  • War & nuclear risks.

  • Waiver of subrogation.

  • Criminal acts, libel, slander or other defamations and professional liabilities e.g. architects, managers, etc.

  • Major Shareholders Exclusion: Any claim brought by major shareholders having more than stipulated % of voting stock or by any security holder unless the security holders without instigation and totally independent of major shareholders bring about the claim.

  • Pending and Prior litigation exclusion.

  • Entity EPLI and Entity Security claims (except if covered as an extension).

  • Auto acquisition of subsidiaries with an asset size of more than stipulated %.

  • Environmental liability & ADR claims originating from US/Canada.

Lift (Third Party) Insurance

Lift (Third Party) Insurance policy is designed for owners of passenger lifts in buildings to take off their liabilities arising out of the use and operation of the lifts. This insurance policy provides indemnity for the legal liability of the insured for payment of compensation to third parties for loss of life or bodily injury or for the damage to the third party property. It also covers legal expenses incurred by the insured with the consent of the insurer for defending any legal action against the former by such third parties.


  • Any lift used for carriage of passengers/goods including hoists fitted in offices, multi-storeyed business and residential complexes, hospitals/theatres etc.

  • Lift includes the operating plant machinery safety appliances, devices, doors etc.


  • Death or bodily injury of any person being a Third Party and not members or of his employees of the insured

  • Loss or damage to property (not being the property of the insured or of his family members or of his employees)

  • Direct damage to personal effects of any person(not being the property of the insured or of his family members or of his employees)


  • Injuries caused directly by Boiler Explosion or Fire.

  • Consequential Loss

  • Ionizing or contamination by radioactivity from any source whatsoever

  • any accident, loss, destruction, damage or Legal Liability directly or indirectly caused by or contributed to by or arising from nuclear weapons material.

Employer’s Liability

An employers' liability insurance policy covers statutory liability of an employer for the death of or bodily injuries or occupational diseases sustained by the workmen arising out of and in course of employment. Generally, this insurance plan covers compensation and legal costs when an employee sues his/her employer for work-related injury or illness. The amount of compensation covers things like loss of income or medical costs.


Any business or employer that requires protection from financial loss because of a work-related illness or injury needs employers' liability insurance. Even if the company has strict safety protocols at its workplace, accidents can occur. Sometimes even a single injury at the workplace can impact the entire business if the employer is not insured adequately.


Employer's liability insurance covers four categories:

Third-party-over action lawsuits

In this type of lawsuit another organization can sue the company over an injury. This often happens when a worker gets injured due to the malfunctioning of work equipment.

Loss of consortium lawsuits

These kind of lawsuits are created by a family when an employee is severely debilitated or dies from a workplace injury.

Dual-capacity lawsuits

Dual-capacity lawsuits occur when an employee sues due to an injury caused by a product the company manufactures. 

Consequential bodily injury lawsuits

This occurs when an employee’s spouse sues the company for the consequential injuries or illnesses suffered by the employee.


  • Any injury by accident or disease directly attributable to war and nuclear risk

  • Insured's liability to employees of contactors to the insured

  • Any liability of the insured which attaches by virtue of an agreement.

  • Any compensation for diseases mentioned in Part 'C' of Workmen's Compensation Act‐ 1923

Employer’s Liability

This policy covers the legal liability of the transport carrier for loss or damage to goods entrusted to him for transport from one place to another. The coverage is restricted to loss or damage to goods arising out of a fire or any other accident to the carrying vehicle and insurers generally insist that the carrying vehicle should also be covered comprehensively under motor insurance.


The following eventualities are covered: 

  • Loss of or damage to cargo directly caused by fire, explosion or accident to the carrying vehicle.

  • Financial loss resulting from the lost freight in connection to the damaged part of the cargo.

  • Legal and other costs, incurred in the litigation against the claimants.

  • Costs of average adjusters

  • Breakage due to indecent handling.

  • Cargo salvage, transshipment, emergency storage costs.

  • Flood or water damage or damage by other cargo


The policy does not provide coverage in the following cases: 

  • Any damage or loss that takes place beyond the period of insurance.

  • Strikes or acts of terrorism.

  • Depreciation, delay, loss of market or any act of confiscation by the public authority.

  • Rejection from the government, government agency or other competent authority to grant necessary or license or permit

  • Liability under any other contract not under Carriers Act 1865.

  • Liability in respect to the damage to property belonging to insured or his employees or in his control

  • Inherent vice or defect, deterioration, wear and tear, decay or spontaneous combustion of perishable goods is excluded from carrier legal liability insurance coverage.

  • Consequential loss arising from the loss or damage to goods.

  • Consequential loss arising from riots, strikes, war, ionizing radiation 

  • Goods which may be illegal or illicit or smuggled

Cyber Risk Insurance

Commercial businesses face a wide range of first and third party liabilities arising out of cyber exposures associated with e-business, internet, networks and information assets. Companies with access to private & confidential information about their customers have a responsibility to keep it secure. Equally, companies who have a web presence or a dependency on technology have emerging content and transactional exposures. With cyber risk steadily increasing, security/ data breaches affect millions of records a year. Cyber Risk insurance coverage is designed to help an organization mitigate its risk exposure by offsetting costs involved with recovery after a cyber-related security breach or similar event.


  • Data Breach Coverage

  • Business Interruption Loss Reimbursement

  • Cyber Extortion Defense

  • Forensic Support

  • Legal Support

  • Coverage Beyond a General Liability Policy


  • Data breach and privacy management:
    The insurance company covers the costs associated with the management of an incident related to cyber-crime. The covered expenses here include the cost of:

    • Investigation

    • Data subject notification

    • Call management

    • Remediation

    • Credit checking for data subjects

    • Legal costs

    • Court attendance and regulatory fines

  • Multimedia and media liability cover:
    This insurance covers the third-party damages including specific defacement of website and intellectual property rights infringement.

  • Extortion liability cover:
    The cyber insurance policy also covers the losses due to a threat of extortion and the professional fees related to dealing with the extortion.

  • Network Security liability:
    This may include the third-party damages as a result of the denial of access, costs related to the theft of data on third-party systems etc.

In some cases, some of the cyber liability covers may overlap with other policies like professional indemnity, but a decent cyber insurance policy always ensures that the cyber risks are adequately catered for.


  • Dishonest or improper conduct of the insured which led to the claim

  • Physical injury caused due to cyber attack

  • Property damage caused by cyber attack

  • Unsolicited communications by the policyholder

  • Mechanical failure, standard depreciation, electrical disturbance and media failure or malfunction

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