Premiums, Policy Types and 2026 Rules
CGL vs public liability policy in India: which one does your business need?
How a commercial general liability policy differs from an industrial or non-industrial public liability policy in India, with a coverage table and decision guide.
A public liability policy in India covers your legal liability for third-party injury and property damage arising mainly from your premises and the operations carried on there, and comes in an industrial version (factories, workshops, warehouses) and a non-industrial version (shops, offices, hotels, schools, clinics). A commercial general liability (CGL) policy is broader: it normally combines premises and operations, products and completed operations, and often personal and advertising injury in one wording, with options such as additional insured and contractual liability. If you only receive visitors at fixed premises, public liability may be enough. If you make or sell products, work at client sites, or have contracts that ask for "CGL", buy CGL.
This guide is part of the business liability insurance overview. Wordings differ by insurer, so treat the table below as a typical pattern, not a guarantee.
Coverage compared
| Feature | Public liability (industrial) | Public liability (non-industrial) | CGL |
|---|---|---|---|
| Injury or damage at your premises | Yes | Yes | Yes |
| Your operations away from premises | Limited or by extension | Limited or by extension | Usually yes |
| Products you made or sold, after they leave your hands | Usually excluded | Usually excluded | Usually yes (products and completed operations) |
| Work you finished at a client site, causing damage later | Usually excluded | Usually excluded | Usually yes |
| Personal and advertising injury (defamation, wrongful eviction, copyright in ads) | No | No | Often included as a separate coverage part |
| Trigger | Mostly occurrence | Mostly occurrence | Occurrence or claims-made |
| Contractual liability you assume | Excluded | Excluded | Excluded except "insured contracts" in many wordings |
| Typical rating basis | Process, turnover or premises | Premises type, area, footfall | Turnover by activity |
When a public liability policy is the sensible choice
- A shop, showroom, restaurant, clinic, coaching centre or office whose main exposure is people visiting the premises
- A factory whose products are low risk and sold only to businesses who have their own cover, and which has a separate product liability policy
- A small business with no client contracts demanding broader cover
Check whether the non-industrial policy you are offered is a standalone policy or a section within a shopkeeper's or office package policy. Package sections often carry modest limits such as a few lakh rupees, which may be too low for a serious injury claim.
When CGL is the better fit
- You manufacture, import, brand or sell products to consumers, especially food, cosmetics, electrical or children's products
- You install, repair or maintain equipment at customer premises
- You are a contractor or subcontractor, or a client contract or tender asks for CGL with a specified limit
- You are part of a group whose parent buys CGL globally and wants a local Indian policy
- You export and need products cover with a defined territory and jurisdiction
What both usually exclude
Expect most liability wordings to exclude, unless specifically extended:
- Liability to your own employees (covered by employees' compensation and employer's liability)
- Damage to property you own, rent or have in your care, custody or control
- Gradual pollution (cover is often limited to sudden and accidental pollution)
- Professional advice and design errors (needs professional indemnity)
- Motor vehicles required to be insured under the Motor Vehicles Act, 1988
- Fines, penalties and, in many wordings, punitive or exemplary damages
- Product recall, and the cost of repairing or replacing your own defective product or work
- War, terrorism (unless added), nuclear risks and asbestos
The liability exclusions guide explains each in more detail.
Worked example: a contractor choosing between the two
An electrical contractor (illustrative turnover ₹3 crore) works mostly at client factories. It receives:
- Option 1: Industrial public liability, ₹50 lakh AOA / ₹50 lakh AOY, premium ₹11,000 + GST
- Option 2: CGL including completed operations, ₹50 lakh AOA / ₹1 crore AOY, premium ₹19,000 + GST
Three months after finishing a job, a panel it installed overheats and damages a client's machinery worth ₹18 lakh. Under Option 1 the damage arises from completed work away from the insured premises, which the policy is likely to exclude: the contractor pays ₹18 lakh plus defence costs itself. Under Option 2, completed operations cover responds, subject to the deductible and policy terms. The difference in premium is ₹8,000 + GST, or ₹9,440. Note also that damage to the panel itself, the contractor's own work, would usually be excluded under both.
How to ask for the right quote
- Describe every activity, including work at client sites and any products.
- Ask the insurer or broker which coverage parts are included: premises and operations, products and completed operations, personal and advertising injury.
- Ask whether the policy is occurrence or claims-made, and the retroactive date if claims-made. See occurrence vs claims-made.
- Request the extensions your contracts need, for example additional insured and waiver of subrogation. See insurance clauses in contracts and tenders.
- Compare quotes on the same limits and deductible using the liability quote comparison tool.
Frequently asked questions
Is CGL just public liability with products added?
Broadly, yes, but the details matter: completed operations, personal and advertising injury, insured-contract wording and supplementary payments are features you may not get by adding a products extension to a public liability policy.
Do I need a separate product liability policy if I buy CGL?
Usually not, if the CGL includes products and completed operations with an adequate limit and the right territory. Some exporters still buy a separate product policy to set different limits or jurisdiction. See product liability.
Can a small business buy CGL?
Yes. Insurers offer CGL for small and medium businesses, though minimum premiums may make it dearer than a basic public liability policy.
Does either policy cover my landlord?
Only if the landlord is named as an additional insured or the wording otherwise extends to them. Ask for this if the lease requires it.
Sources
- IRDAI — registered general insurers and product information
- India Code — Motor Vehicles Act, 1988 and other statutes referred to in exclusions
- General Insurance Council — industry information on non-life products
