Liability insurance buying checklist for Indian businesses: from quote to policy schedule

To buy business liability insurance well in India, work in three stages: describe the business completely (activities, products, premises, contracts and claims history), compare quotes like for like (same policy type, limits, deductible, trigger, territory and extensions, then total cost including 18% GST), and check the policy schedule and wording against what you agreed before the cover starts. Most expensive problems come from the first and third stages, not from paying a slightly higher premium. The checklist below runs through each step and links to a detailed guide for every decision.

This is the pillar guide for Worked Quotes and Buying Checklists. You can tick the steps off with the liability cover checklist tool.

Stage 1: describe your business before asking for quotes

Activities and turnover

List every activity with its share of turnover, including minor ones: installation, maintenance, events, deliveries, food service, online sales
Separate India and export turnover, and name the export countries
Say whether you do work at client sites, at height, underground, or with hot work such as welding

Premises

Addresses of every premises, including godowns and branch offices
Type of construction, number of floors, visitor footfall where relevant
Fire safety measures and certificates

Hazardous substances

Check whether you handle any substance listed under the Public Liability Insurance Act, 1991 above the threshold; if so, a PLI Act policy is compulsory

Employees

Number of employees and wages by category, and who is covered by ESI. See employees' compensation

Contracts

Collect insurance clauses from client contracts, leases, tenders and distribution agreements. Note required limits, additional insured, waiver of subrogation and notice of cancellation. See insurance clauses in contracts and tenders

Claims history

Five years of claims, near-misses and complaints, with amounts paid and reserved. The proposal form guide explains what counts as material

Stage 2: choose the cover you are asking for

Decision	Ask yourself	Guide
Policy type	Premises only, or products and completed operations too?	CGL vs public liability
Limit AOA and AOY	What is my worst realistic claim, and what do contracts require?	Choosing the limit of indemnity
Deductible	How much of each claim can I absorb without strain?	Deductible worked example
Trigger	Occurrence or claims-made, and what retroactive date?	Occurrence vs claims-made
Specialist covers	Do I give advice or have a board needing protection?	PI and D&O quotes

Write these choices into a one-page specification and send the same specification to every insurer or broker. Without it, quotes come back on different bases and cannot be compared.

Stage 3: collect and compare quotes

Approach at least two or three sources: direct insurers, an IRDAI-licensed broker, or a corporate agent attached to your bank. Check registration on the IRDAI website.
Ask each for the policy wording and any endorsements, not just a quote sheet.
Tabulate the quotes: premium before GST, GST, total, limits, deductible, trigger, retroactive date, territory, jurisdiction, extensions, key exclusions and sub-limits.
Run a claim scenario through the liability quote comparison tool to see the cost with a realistic claim, not only the premium.
Read the worked quote comparison for a full example.

Questions to put to every insurer

Are defence costs inside or in addition to the limit?
Is the policy adjustable on actual turnover or wages at expiry?
What is the minimum premium?
Which extensions are included at no cost, and which are charged?
How must claims and circumstances be notified, and within what time?

Stage 4: buy and pay correctly

Complete and sign the proposal form yourself, or check every answer a broker has filled in
Pay the premium before the start date: under section 64VB of the Insurance Act, 1938 the insurer cannot assume risk until premium is received
Make sure the policy is in the business's legal name with its GSTIN, so the invoice supports input tax credit; see GST on liability premiums

Stage 5: check the schedule when it arrives

Item on the schedule	Check against
Insured name, address, GSTIN	Certificate of incorporation, GST registration
Business description	Your activity list
Limits AOA and AOY, sub-limits	Your specification and contract requirements
Deductible	Quote accepted
Policy period and retroactive date	Previous policy, with no gap
Territory and jurisdiction	Where you sell and work
Endorsements	Additional insured names, cross liability, waiver of subrogation
Premium and GST	Invoice and payment

Ask for corrections in writing at once. A schedule error discovered after a claim is much harder to fix.

Stage 6: during the year

Tell the insurer about new activities, new premises or a big change in turnover
Notify incidents and complaints promptly, even if you think no claim will follow
Diary the renewal at least 45 days ahead, and start the specification again

Frequently asked questions

Do I need a broker?

Not always. Simple risks can be bought direct. A broker earns its keep with complex activities, exports, contract requirements or claims, and should be IRDAI-licensed.

How long does it take to get a liability quote?

For a simple risk, days. For manufacturing, exports or high limits, allow two to four weeks, because underwriters may ask questions or want a survey.

Can I change the limit mid-year?

Usually yes, by endorsement with an additional premium. Do it before you sign a contract that needs the higher limit.

What if a client needs a certificate of insurance?

Ask the insurer or broker for one that accurately reflects the policy. A certificate does not expand the cover beyond the wording.

Sources

IRDAI — check that insurers, brokers and agents are registered
India Code — Insurance Act, 1938 including section 64VB
CBIC GST portal — GST on insurance services