Commercial General Liability (CGL) insurance exists to protect your business from financial loss due to unexpected accidents and lawsuits. But what does that really look like in practice?
In Malaysia, many SMEs and business owners don’t fully understand the types of claims CGL actually covers — until it’s too late.
In this article, we’ll walk you through the most common CGL insurance claims in Malaysia, with real-world examples and tips on how to prevent them. This knowledge not only helps you stay protected but also improves your chances of securing a successful claim if an incident occurs.
1. Slip-and-Fall Incidents (Bodily Injury Claims)
Frequency: Very common in retail, F&B, fitness, and public-facing industries.
Example:
A customer enters your convenience store during a rainy day, slips on a wet floor without warning signs, and fractures their wrist. They sue your business for medical expenses, lost income, and pain and suffering.
What CGL Covers:
- Medical costs for the injured party
- Legal defence and court costs
- Settlement or awarded damages
Risk Reduction Tips:
- Place “Wet Floor” signs during cleaning or rainy weather
- Use anti-slip mats and flooring
- Regularly inspect and maintain public areas
2. Property Damage to Third Parties
Frequency: Common in industries involving onsite work — e.g. renovation, installation, logistics, cleaning.
Example:
Your electrical installation team accidentally drills through a water pipe at a client’s office, flooding the premises and damaging furniture and computers.
What CGL Covers:
- Cost to repair or replace damaged third-party property
- Legal claims for business interruption losses (if specified in policy)
- Court-awarded damages
Risk Reduction Tips:
- Conduct detailed site assessments before work
- Invest in staff training and checklists
- Clarify roles of subcontractors and ensure insurance alignment
3. Product-Related Injury or Damage (Product Liability)
Frequency: Frequent in F&B, consumer goods, and e-commerce.
Example:
A customer claims your packaged food product caused food poisoning. They file a lawsuit demanding compensation for hospitalisation and loss of income.
What CGL Covers (if product liability extension is included):
- Bodily injury or property damage caused by your product
- Legal costs, investigations, and settlements
Risk Reduction Tips:
- Follow food safety standards (HACCP, GMP, ISO 22000)
- Maintain proper labelling and warnings
- Keep traceability records for recalls
4. Defamation and Advertising Injury
Frequency: Moderate but rising due to social media marketing and competitive advertising.
Example:
Your business posts a comparison ad that unintentionally damages a competitor’s reputation. They sue you for defamation and loss of business.
What CGL Covers:
- Legal defence costs
- Settlements for defamation, libel, slander, or copyright infringement in ads
Risk Reduction Tips:
- Avoid naming or referencing competitors directly
- Get legal or compliance reviews for marketing content
- Train your marketing team on acceptable advertising practices
See: CGL vs Public Liability vs Professional Indemnity
5. Tenant’s Legal Liability (Property You Rent)
Frequency: Common among cafes, restaurants, salons, and retail tenants.
Example:
An electrical fire starts in your rented unit due to a malfunctioning coffee machine. The landlord sues you for fire damage to the shop lot.
What CGL Covers (if tenant’s legal liability is included):
- Repair or reconstruction costs of damaged rental property
- Legal claims filed by property owner
Risk Reduction Tips:
- Ensure electrical equipment is maintained regularly
- Install smoke detectors and fire extinguishers
- Review your tenancy agreement for insurance obligations
6. Injury Caused by Completed Services
Frequency: Common in renovation, plumbing, pest control, and other hands-on industries.
Example:
A week after your plumbing service, a pipe bursts in the client’s home, damaging walls and flooring. The client claims poor workmanship and seeks damages.
What CGL Covers (if completed operations is included):
- Damage or injury caused after your work is done
- Legal and compensation costs
Risk Reduction Tips:
- Offer documented handovers and inspection reports
- Use quality materials and licensed contractors
- Document before-and-after work with photos
7. Legal Defence – Even When You’re Not at Fault
Frequency: Frequent. Frivolous or baseless lawsuits still require a defence.
Example:
A third party sues your business, falsely claiming your product caused them harm. The case is dismissed, but you’ve incurred RM15,000 in legal fees.
What CGL Covers:
- Lawyer’s fees
- Court filing costs
- Witness costs and related expenses
Risk Reduction Tips:
- Keep detailed records of all transactions and communications
- Ensure product testing and certifications are up-to-date
- Have disclaimers and waivers where applicable
What Is Not Covered (to Avoid Confusion)
While CGL covers a wide range of scenarios, it doesn’t cover:
- Employee injuries (Workmen Compensation Insurance is required)
- Professional errors or advice (covered by Professional Indemnity Insurance)
- Deliberate misconduct or criminal acts
- Vehicle-related claims (covered by Motor Insurance)
- Cyberattacks or data breaches (covered by Cyber Insurance)
Learn more: General Insurance Myths to Avoid
Real-Life Malaysian Scenario
Case:
A cleaning service provider was contracted to maintain office floors in a commercial tower in Kuala Lumpur. A client slipped due to an unmarked wet area, suffering a head injury.
CGL claim payout included:
- RM28,000 in medical reimbursement
- RM15,000 legal defence
- RM10,000 out-of-court settlement
Without insurance, this small business would have had to close operations.
Conclusion
Commercial General Liability Insurance is more than just a compliance tool — it’s a financial safety net for the most common, real-world risks Malaysian businesses face.
From customer injuries to product claims, advertising disputes, and rental property damage — CGL helps your business stay afloat, even when the unexpected strikes.
Need Help Understanding Your Risk Profile?
At Minaris, we help SMEs and business owners get tailored general liability coverage — so you only pay for the protection you need.
👉 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.