As a business owner in Malaysia, safeguarding your company from unforeseen risks is no longer optional—it’s essential. One major way to protect your operations is through the right liability insurance.
Two of the most common options are Public Liability Insurance and Comprehensive General Liability (CGL) Insurance. While they sound similar, they cover different risks. Knowing the difference—and which one fits your business—is critical.
Here’s a five-step guide to help you choose the right liability insurance:
Step 1: Assess Your Business Risks
Start by identifying the unique risks in your line of work.
- Are you in a high-risk sector like construction, hospitality, or manufacturing,
where accidents are more likely? - Do you frequently deal with walk-in customers or clients at your premises?
- Do you sell products that could potentially cause harm or property damage?
The nature of your business determines the type and extent of liability insurance you’ll need.
Step 2: Understand Public Liability Insurance
Public Liability Insurance protects your business if a third party (customers, visitors, suppliers, or members of the public) suffers:
- ✅ Bodily injury (e.g., slip-and-fall accident at your shop)
- ✅ Property damage (e.g., contractor damaging a client’s property during
renovation)
This coverage is vital for businesses that regularly interact with the public, such as restaurants, retail outlets, clinics, and event organisers.
Step 3: Understand Comprehensive General Liability (CGL) Insurance
Comprehensive General Liability (CGL) Insurance is one of the most common requirements in industries like oil & gas, telecommunications, power plants, IT, and engineering projects. Contractors are often required to produce a valid CGL policy before works can commence, as part of their contractual obligations.
A CGL policy protects your business by indemnifying you against legal liability for third-party bodily injury or property damage caused by accidents while carrying out your work. For example, if a subcontractor accidentally damages the principal’s property during installation, or if a passerby is injured near your project site, the policy responds.
Importantly, CGL insurance also covers:
- Legal defence costs and related expenses incurred in handling a claim (up to the defined limit of indemnity).
- Extensions of coverage, such as contractual liability, sudden and accidental pollution liability, or damage to the principal’s existing property (depending on the policy terms).
This makes CGL a critical protection tool for contractors and service providers, ensuring they can meet contractual requirements while safeguarding their financial stability if accidents occur.
Step 4: Evaluate Policy Coverage and Limits
When comparing Public Liability and Comprehensive General Liability (CGL) policies, remember that no two policies are identical. The fine print matters.
- Coverage limits: Ensure the sum insured is high enough to cover the worst-case scenario in your industry.
- Exclusions: Study carefully—common exclusions may include motor accidents, pure financial loss, or professional services.
- Add-ons and extensions: Depending on your business, you may benefit from options such as contractual liability, pollution liability, or coverage for the principal’s existing property.
- Premiums and deductibles: A lower premium might look attractive, but high deductibles or narrow coverage can create costly surprises later.
💡 Pro tip: Always seek guidance from an experienced insurance advisor who can match policy terms with your actual business risks and contractual requirements.
Step 5: Balance Coverage with Affordability
Price is important, but choosing the cheapest policy can leave your business dangerously underinsured. Instead, aim for value:
- Set a budget that realistically covers the minimum protection you cannot afford to go without.
- Factor in your claims history, industry-specific risks, and potential liabilities when deciding on limits.
- Review your coverage regularly—as your contracts and operations grow, so do your risks.
The goal is to strike the right balance between comprehensive coverage and financial sustainability.
Conclusion
While Public Liability Insurance and Comprehensive General Liability (CGL) Insurance may sound similar, they serve different purposes:
- Public Liability – Best suited for businesses dealing directly with customers and the general public.
- CGL Insurance – Broader protection, often required under contracts, covering not just public exposure but also product liability, completed operations, and other high-risk activities.
By following these five steps—evaluating your risks, understanding policy differences, reviewing coverage limits, and balancing affordability—you’ll be equipped to choose the right insurance strategy to safeguard your business.
👉 At Minaris Risk Management, we specialise in helping businesses like yours find tailored liability solutions. With the right coverage in place, you can focus on growth while staying protected from unexpected claims.
Ready to Get Covered?
👉 Talk to an Expert at Minaris today.
Get protected with a plan that fits your business.
Lim Sing Yue is an Insurance Advisory Manager with a Bachelor Degree of Business Administration (HONS) and strong expertise in client servicing, sales operations, and strategic account management. With experience in multinational firms across the electronics and procurement sectors, she excels in delivering tailored insurance solutions with efficiency and precision.