Professional performance as a company or self-employed exposes you to different risks and responsibilities. Do you know what Civil Liability Insurance covers in a company? Find out if your civil liability policy has the necessary coverage for your activity.
Civil Liability Insurance protects your assets and collects possible claims for damages that you may cause to a third party.
As a definition, the civil liability of a company is the legal obligation to compensate for the damages or losses caused to a third party. In other words, it is the obligation to compensate a third party for the damage caused, whatever the legal form of the company.
For civil liability to exist, the following must have occurred:
- The identification of the activity or fact that has generated the damage.
- The causal link between both parties.
You must know the terminology when contracting Civil Liability Insurance.
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For this reason, it is essential to know what type of civil liability policy we have contracted and what are the coverages that we must have included according to our professional activity.
In the event of not having a Civil Liability policy or not having specific coverage in case of an accident, it may mean that we have to respond to a claim with our assets.
Types of Civil Liability
To begin, we indicate that there are two basic types of civil liability:
Also called Professional Civil Liability, which is the obligation to indemnify third parties when we are faced with a breach of contract.
- Example of Professional Civil Liability: If we are providers of a service and our work causes harm, damage, or is not carried out correctly and produces personal, material, or economic damage to our client. We will be covered under (except policy exclusion) by the RC Professional insurance.
Also called General RC or Exploitation. When it does not derive from a contractual relationship. “Whoever by action or omission causes damage to another, intervening fault or negligence, is obliged to repair the damage caused. “
The coverages when contracting a Civil Liability Insurance
Within the RC policy, different risks can be covered in different types of coverage depending on the activity you carry out. When contracting civil liability insurance we have to specify very well what our activity is.
It is very important to know the details to be able to advise you correctly and draw up the civil liability insurance following the main development of the company.
Based on this legal framework, insurers have created different types of civil liability policies. The most outstanding coverages would be:
CR Exploitation or General CR
The coverage of RC exploitation in the civil liability insurance covers claims for damages to third parties during the development of the professional activity.
- Example of general liability coverage: A customer enters our store and falls on the wet floor. If you suffer any damage as a result of this fall, the compensation will be covered by the contracted general civil liability insurance.
Essential coverage in civil liability insurance for companies. Especially when they are companies with a large number of workers. Employer’s civil liability covers the claims of employees after suffering an accident at work or their relatives after the death of the employee. As long as there is negligence on the part of the employer.
With the Employer’s RC, the responsibility that the company may have for the damages suffered by its personnel is covered. For example, an accident at work involving compensation. Since these compensations can be of very high amounts, the employer’s RC is an essential coverage in the civil liability insurance for any company.
Is Civil Liability Insurance compulsory?
As a general rule, no. But there are some activities where the legislation does require contracting civil liability insurance to companies where there is a high percentage of risk or damage. It all depends on the activity that your company develops.