Commercial General Liability Insurance (CGL) is often seen as a “catch-all” business protection plan — but in reality, it has specific and defined areas of coverage.
Understanding exactly what is (and isn’t) covered will help Malaysian business owners make informed decisions when choosing a policy.
This article breaks down each main coverage area of a standard CGL policy in Malaysia, with local examples and clarification to avoid costly assumptions.
What Is Covered Under CGL Insurance in Malaysia?
In Malaysia, most standard CGL insurance policies cover the following:
1. Bodily Injury to Third Parties
This includes injuries to customers, suppliers, or visitors that happen on your business premises or as a result of your operations.
Example:
A customer trips over a loose floor tile in your retail store and fractures their wrist. Your CGL policy may cover:
- Medical expenses
- Legal fees if a lawsuit is filed
- Compensation or settlement costs
Important: This does not cover injuries to your own employees — that falls under Workmen Compensation Insurance.
2. Damage to Third-Party Property
CGL covers accidental physical damage to property owned by others due to your business operations or negligence.
Example:
Your cleaning company accidentally knocks over and damages expensive equipment at a client’s office. The policy may cover the repair or replacement costs.
3. Legal Defence and Settlement Costs
Even if you are not at fault, lawsuits can be expensive. CGL insurance typically covers:
- Lawyer’s fees
- Court filing and expert witness fees
- Settlement amounts (within your policy limit)
- Appeal costs
Example:
A competitor sues your company for advertising defamation. Your CGL policy may cover legal fees and settlement negotiations.
4. Personal Injury and Advertising Injury
This refers to non-physical damage caused by your business — such as:
- Libel or slander
- False arrest or wrongful detention
- Copyright infringement in advertising
- Misappropriation of advertising ideas
Example:
You run a digital ad campaign using a slogan that closely resembles a competitor’s. They sue for advertising injury. Your insurer may provide legal defence and indemnity.
5. Tenant’s Legal Liability
If you rent your business premises and cause damage to the rented property (e.g. fire, flooding, accidental destruction), CGL may cover:
- The cost of repairs
- Legal liabilities toward the landlord
Example:
An electrical fire starts in your rented bakery kitchen. The damage to the shop is covered under tenant’s legal liability in your CGL policy.
6. Products and Completed Operations Coverage (Optional Add-On)
Some insurers in Malaysia offer optional protection for:
- Product liability: If your product causes harm to a customer.
- Completed operations: If completed services cause damage or injury later on.
This coverage is often vital for:
- Food and beverage manufacturers
- Construction companies
- Repair and installation businesses
Example:
A faulty electric kettle your company sells short-circuits and causes a small kitchen fire. The policy may cover the claim if product liability is included.
Want to learn more? Read our General Liability Insurance Coverage in Malaysia
What Is Not Covered Under CGL Insurance?
Even a comprehensive policy has exclusions. These are typically not covered:
Not Covered | Why |
Employee injuries | Covered by Workmen Compensation Insurance |
Intentional damage or misconduct | Considered fraud; voids coverage |
Professional advice errors | Covered by Professional Indemnity Insurance |
Auto-related incidents | Covered under Motor Insurance |
Cyber risks or data breaches | Covered under Cyber Insurance policies |
Product recall costs | Usually excluded unless add-on is purchased |
More details: General Insurance Myths to Avoid
Local Claims Example (Malaysia)
Case Study:
A contractor in Klang Valley accidentally drilled into a building’s main water pipe during renovation work. The client sued for property damage and business interruption losses.
- CGL policy covered:
- The cost of repairing the pipe
- Legal defence
- A partial settlement
- Not covered:
- Lost revenue claimed by the client due to downtime (this would require business interruption insurance)
- Lost revenue claimed by the client due to downtime (this would require business interruption insurance)
Should You Customise Your Coverage?
Yes — because every business faces unique risks, CGL policies in Malaysia can be customised with:
- Higher coverage limits
- Specific endorsements (e.g., cross-liability, product liability extensions)
- Industry-specific protections
Speak with a licensed provider to assess your needs. Want help? Start with our Comprehensive General Liability Insurance Guide
Conclusion
Commercial General Liability Insurance does not cover every risk your business faces — but it does provide critical protection against the most common and financially devastating third-party claims.
From injury to property damage to advertising liability, CGL serves as a legal and financial safety net for businesses of all sizes in Malaysia.
Need Help Choosing the Right Coverage?
Minaris can help you understand, compare, and customise CGL policies that match your industry risks and budget. We’ll ensure your business is protected before something goes wrong.
👉 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.