If you’re running a business in Malaysia, you’ve likely come across terms like Commercial General Liability (CGL), Public Liability Insurance, and Professional Indemnity Insurance.
These insurance types may sound similar — after all, they all deal with risk and liability — but they serve very different purposes.
In this article, we’ll break down:
- What each type covers
- Who needs which type
- How they compare (with tables)
- Common misconceptions
- Malaysian-specific use cases
By the end, you’ll know which coverage best fits your business needs — or whether you might need all three.
What is Commercial General Liability (CGL) Insurance?
CGL is an all-rounded liability insurance that protects your business from:
- Third-party bodily injury
- Property damage
- Personal injury (e.g., libel or slander)
- Advertising injury
- Legal defence costs
It’s suitable for most businesses that interact with clients, customers, the public, or vendors — whether on-site or off-site.
Learn more: Commercial General Liability Insurance in Malaysia: Everything You Need to Know
What is Public Liability Insurance?
Public Liability Insurance is a simpler, more limited form of coverage. It typically protects businesses against:
- Bodily injury to third parties
- Property damage caused to others during operations
However, it excludes:
- Personal or advertising injury (e.g., defamation)
- Legal defence for copyright infringement
- Tenant legal liability
- Completed product or service-related incidents
Public Liability is often chosen by:
- Retail shops
- Small event vendors
- Food trucks
- SMEs with minimal risk exposure
🧠 Want a full comparison? See Public vs General Liability Insurance
What is Professional Indemnity Insurance?
Professional Indemnity (PI) insurance protects professionals and businesses that provide advice, consultancy, or services. It covers:
- Claims of negligence
- Errors or omissions
- Breach of duty
- Unintentional violation of intellectual property
This is essential for:
- Accountants
- Consultants
- Engineers
- Architects
- Lawyers
- Medical professionals
Many Malaysian regulatory bodies require PI coverage for licensed professionals. For example:
- The Board of Engineers Malaysia (BEM) mandates PI for practicing engineers.
- The Bar Council of Malaysia requires lawyers to carry PI under the Compulsory Professional Indemnity Insurance Scheme.
🔗 External reference:
Comparison Table: CGL vs Public Liability vs PI
Feature / Coverage Area | CGL Insurance | Public Liability | Professional Indemnity (PI) |
Bodily Injury to Third Parties | ✅ Yes | ✅ Yes | ❌ No |
Third-Party Property Damage | ✅ Yes | ✅ Yes | ❌ No |
Advertising or Personal Injury | ✅ Yes (e.g., defamation) | ❌ No | ❌ No |
Legal Defence Costs | ✅ Yes | Limited | ✅ Yes (for covered claims) |
Tenant’s Legal Liability | ✅ Often included | ❌ Not included | ❌ No |
Advice, Errors, or Negligence Claims | ❌ No | ❌ No | ✅ Yes |
Required for Government Contracts | ✅ Often | ✅ Sometimes | ✅ Yes (for regulated professions) |
Suitable For | Most businesses | Low-risk, public-facing SMEs | Professionals, consultants |
Which One Does Your Business Need?
Here’s how to decide:
Business Type | Recommended Insurance(s) |
Retail shop / Cafe | Public Liability or CGL |
Contractor / Builder | CGL + PI (for design or consultation) |
Consultant / Accountant | PI is essential |
E-commerce Seller | CGL (especially with product liability add-on) |
Medical Clinic | PI (Medical Indemnity) + CGL |
Tech Startup | CGL + PI (especially if advising clients) |
Manufacturer | CGL with product liability extension |
In most cases, CGL provides more complete protection than Public Liability. However, if your business gives professional advice or services, you will also need Professional Indemnity Insurance.
Related: Public Liability vs Professional Indemnity – Key Differences
Can You Combine These Coverages?
Yes. In fact, many Malaysian insurers offer bundled coverage packages for SMEs and professional firms.
For example:
- A contractor may need both CGL for jobsite accidents and PI for design faults.
- A creative agency may require PI for copyright issues and CGL for injury at their studio.
Combining policies:
- Reduces premium costs
- Prevents overlapping or missing coverage
- Meets contractual and regulatory requirements
Common Misconceptions (and Clarifications)
Misconception | The Truth |
“CGL and Public Liability are the same.” | Public Liability is a subset of what CGL covers. |
“PI insurance covers workplace injuries.” | No. Workplace injuries are covered by Workmen Compensation Insurance. |
“Only large companies need CGL.” | SMEs often face the same liability risks and lawsuits. |
“You only need PI if you’re a consultant.” | If you provide advice or designs, even as part of another service, PI is needed. |
✅ Also check: General Insurance Myths to Avoid
Real-World Scenarios
Scenario 1 – CGL Need
A customer slips on a wet floor in a shopping mall you manage. They suffer a back injury and sue your company. Your CGL policy covers legal fees and compensation.
Scenario 2 – PI Need
An accountant gives incorrect tax advice, leading to penalties for the client. The client sues for negligence. Your Professional Indemnity Insurance covers the legal defence and damages.
Scenario 3 – Public Liability Only
A food vendor at a local fair accidentally spills hot soup on a visitor. There is minor injury, and the claim is handled under Public Liability Insurance.
Conclusion
In Malaysia, choosing the right liability insurance is not just a matter of compliance — it’s about protecting your business, reputation, and future.
- Choose Public Liability if you’re a low-risk, customer-facing business.
- Choose CGL for broader protection across various risks.
- Choose PI Insurance if you give advice, design, or consultancy services.
For many businesses, a combination of CGL and PI offers the most complete protection.
Need Expert Help?
At Minaris, we help Malaysian SMEs and professionals identify, compare, and customise the right insurance mix — with no unnecessary upsells or confusion.
👉 Talk to an Expert at Minaris today.
Get protected with a plan that fits your business.
KH Chew is the Founder and Risk Advisor of Minaris, with over 30 years of experience in the insurance industry. He holds a Diploma in Insurance from the Malaysian Insurance Institute (MII), which laid the foundation for his in-depth expertise in property, financial lines, and other general insurance products. He is widely recognized for developing tailored insurance schemes for professionals and businesses across Malaysia. KH is also a passionate advocate for risk management and regularly advises clients and trade associations on comprehensive coverage strategies.