TrueInsureCRM
8
Liability Insurance
Claims-made basis — the policy must be live when the claim is filed

Covers what other people claim from you: a client suing over your advice, a customer injured by your product, a regulator naming your directors, a visitor hurt on your premises. These are the losses that end businesses rather than dent them, and they are the cheapest large cover you can buy.

₹34,000
from, ₹1 Cr public liability
₹5 Cr
typical SME limit
100%
of legal defence costs included

Illustrative figures until sourced from the insurer of record.

What it covers

Professional indemnity

Error, omission, bad advice

Product liability

Injury caused by what you sell

Directors & officers

Personal liability of the board

Public liability

Injury on your premises

Plans

Professional indemnity, ₹5 Cr limit, ₹10–50 Cr turnover

Premiums and claim-settlement ratios are illustrative until sourced from the insurer of record.

Professional Indemnity

96.8% settled
Tata AIG

Defence costs sit outside the limit rather than eroding it, which on a long-running claim is worth more than the price difference.

₹1.86 L
a year
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Liability Shield

96.2% settled
ICICI Lombard

Broad retroactive cover for work already delivered, which matters if you are buying this later than you should have.

₹1.64 L
a year
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Corporate Liability

98.5% settled
HDFC ERGO

Most expensive, with the strongest panel of defence counsel and the widest definition of a professional service.

₹2.04 L
a year
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What it will not pay for

Read this before you buy.

  • Claims arising before the retroactive date in your schedule
  • Deliberate wrongdoing, fraud and criminal acts
  • Contractual penalties and liquidated damages you agreed to
  • Bodily injury to your own employees — that is workmen compensation
  • Anything notified after the policy expired, even if it happened while live
How a claim works

Liability claims arrive as a legal notice, not an accident. What you do in the first week — and crucially, who you talk to — determines the outcome.

  1. 01

    Notify on the notice, not the judgment

    · day 1

    The moment you receive a notice or become aware a claim is likely. Late notification is the most common liability decline.

  2. 02

    Insurer appoints counsel

    · week 1

    They choose and pay the lawyer. You can request your own, but the insurer must agree to the rate before any bill is incurred.

  3. 03

    Defence, and defence costs

    · months 1–18

    Most claims settle before trial. Defence costs are paid as they arise, and on many policies they erode your limit rather than sitting on top of it.

  4. 04

    Settlement or award paid

    · on settlement

    The insurer settles up to your limit. Anything above it is yours, which is why the limit matters more than the premium on this line.

The common mistake

Letting it lapse between renewals. Liability cover is claims-made: it pays only if the policy is live when the claim is filed. A one-week gap voids a claim about work you did three years ago, retroactively and permanently.