Insights & Articles

General and public liability insurance has long been treated as a background policy, purchased to satisfy a contractual requirement or landlord obligation, and rarely revisited once in place. That approach is increasingly risky. Third-party liability claims, whether from a customer injury, property damage caused by your operations, or a product defect, are trending toward larger settlement values and longer, more expensive litigation. A limit that felt comfortable five years ago may no longer reflect your actual exposure.

What’s Driving Larger Claims

Higher medical and rehabilitation costs. Where a claim involves bodily injury, the cost of medical treatment, ongoing care, and loss of income has risen steadily, pushing up the value of even moderately serious injury claims.

Greater willingness to pursue formal claims. Customers, contractors, and members of the public are more likely than in the past to escalate a dispute into a formal legal claim rather than accept an informal resolution.

Complex supply chains blur responsibility. When multiple parties, contractors, subcontractors, and suppliers, are involved in an incident, liability disputes often take longer to resolve and generate higher legal costs before any settlement is reached.

A recent case illustrates how these disputes actually play out. In 2022, a 71-year-old woman sued Holland-Bukit Panjang Town Council for more than S$33,000 in damages after falling into an uncovered drain and sustaining injuries; the trial concluded in September that year, according to CNA. The case highlights several of the practical issues that determine how these disputes are resolved: identifying which entity (a town council, managing agent, or in the case of drains, often national water agency PUB) is actually responsible for maintenance of the property in question, and establishing whether reasonable inspection and upkeep obligations were met. Claim values in Singapore are also tied closely to venue: the Magistrate’s Court can award damages up to S$60,000, the District Court up to S$250,000 (or up to S$500,000 for road traffic or industrial accident claims), and the High Court for anything above that. A claim’s value, and therefore the forum it proceeds in, depends heavily on the severity of injury and the resulting medical and income-loss costs, underscoring why liability limits calibrated to only modest, routine claims can be quickly overwhelmed by a single serious incident.

Common Blind Spots in General Liability Programs

• Limits set at the minimum required by a landlord or contract, rather than sized to the business’s actual risk profile and worst-case exposure.
• Products liability treated as automatically included, when in fact many general liability policies require it to be specifically extended, particularly for businesses that manufacture, import, or distribute physical goods.
• Contractual liability assumed under customer or supplier contracts that goes beyond what the policy would otherwise cover, sometimes referred to as an indemnity or hold harmless clause.
• Cross liability exposure not addressed when multiple entities within a group, or a principal and its contractors, are named on the same claim.

Why This Matters for Both SMEs and Large Corporates

For SMEs, the risk is often a single, severe incident that exceeds a limit set years ago without much thought. A single serious injury claim can consume an entire policy limit and leave the balance exposed directly to the business.

For larger corporates, the exposure is compounded by scale and complexity: more sites, more contractors, more customer touchpoints, and often multiple jurisdictions. A liability program built for a smaller, simpler operation may no longer match the business as it has grown.

What to Review Before Your Next Renewal

1. Confirm your limit reflects your realistic worst-case exposure, not just a contractual minimum.
2. Check whether products liability, completed operations, and contractual liability are included or need to be specifically extended.
3. Review indemnity clauses in major customer and supplier contracts to confirm your policy actually responds to what you’ve contractually agreed to take on.
4. For groups with multiple entities, confirm how cross liability and cross suits between related companies would be treated.

The Bottom Line

General liability cover that was adequate when the business was smaller, or when contracts were simpler, does not automatically stay adequate as the business grows. A periodic review against actual operations, contracts, and worst-case scenarios is the only way to know your limit still fits.

Speak to our Property & Casualty team about reviewing your general liability limits and extensions.