In day-to-day business, we often encounter situations that can give rise to unexpected legal liabilities. Imagine, for example, that you organize a corporate event and one of the guests suffers an injury. Who would be responsible for repairing the damages caused to third parties in this case?
It depends on many factors, but everything would point to your company. Hence the enormous importance of liability insurance for companies. They are the minimum protection that an organization needs to be able to face the expenses derived from possible claims and legal contingencies.
There is a wide variety of types of liability insurance for professionals and businesses, and in this article we will shed light on what they are.
What is covered by business liability policies?
Before starting, it is necessary to clarify what are the main coverages of liability policies. In other words, what damages that the company may generate with its activity would be covered by these insurances?
The answer may vary, for example, depending on the insurance company you choose. But, in general, all types of liability insurance usually cover:
- Personal injury. They include medical and legal expenses in case of injuries or damages caused to third parties by the company’s operations. This ranges from accidents on your premises, injuries generated by your products or services, or the consequences of misleading advertising practices, defamation, slander or violation of privacy.
- Property damage. They protect the company against costs associated with damage to the property of third parties, such as damage to buildings, vehicles or other assets.
- Economic damages. They cover financial losses suffered by third parties as a result of negligent actions of the company, beyond direct personal injury or property damage.
Depending on the activity of your company, one coverage or another will be more important. For example, in a construction company, it is essential to cover personal and material damages; while in a law firm or a marketing agency, it is more important to protect against potential economic damages that may be caused to clients.
Is it mandatory for all companies and freelancers to have CR insurance?
Another of the great doubts of the professionals is usually about the obligatory nature of having some of the different types of civil liability insurance. Is it really obligatory for the companies? And for the self-employed?00
The truth is that it depends on the sector to which each company belongs and the risk of liability that its activity can generate. If your organization is dedicated to any of the following fields, the answer is yes:
- Construction and works.
- Health care.
- Legal consulting.
- Hotel and restaurant business.
- Architecture.
- Leisure and entertainment.
Of course, although not legally mandatory for all organizations, having liability insurance is a prudent and advisable measure to protect the personal and financial assets of business owners and freelancers in the event of lawsuits or legal claims.
We therefore advise you to make it part of your overall risk management strategy.
Types of liability insurance for companies
As we have already mentioned, there are several types of liability insurance for companies. Let us see which are the main ones:
1. General or operating liability insurance
The most basic is the general liability insurance. It covers possible personal and/or material damages that may be suffered by third parties as a result of the business activity. However, it does not include cases of negligence or professional errors.
2. Professional Liability Insurance
To cover a possible error, negligence or omission in the professional activity, there are professional liability insurances.
It is completely normal for a company to make mistakes, so it is important to be prepared if this happens. This policy would cover, for example, expenses arising from a customer’s claim for negligence.
3. Environmental liability insurance
Other policies are available to cover more specific liabilities. For example, environmental liability insurance. It ensures that your organization is protected in the event of claims arising from environmental damage.
After all, sustainability is the order of the day and every company should be aware of the environmental impact of its activity. This is especially important for companies that work with chemicals, plastics, or industries close to rivers, the sea, or protected areas.
4. Directors “and officers” liability insurance
On the other hand, there is the civil liability insurance for directors. The truth is that there are usually many responsibilities that senior managers and administrators assume in companies and, according to the law, they may have to respond to them with their own personal assets.
To avoid this, it is advisable to have this insurance, also called Directors&Officers (D&O).
5. CR arising from cyber-attacks: cyber-security insurance
In addition, given the technological advances of recent years and the increase in digital threats, it is favorable for companies to have cybersecurity insurance. With this policy, the company can protect itself against possible claims from third parties for damages caused after a cyberattack.
Although these are the policies and coverages most demanded by our clients at PIB Group Iberia, it is worth mentioning that there are many other guarantees, such as with subsidiary civil liability, locative civil liability, real estate civil liability or employer’s civil liability.
If you want to choose the most appropriate one for your company, we can do it for you. In our insurance brokerage in Zaragoza we offer companies the peace of mind of knowing that they are choosing the best liability insurance with the coverage they need and that they will be able to respond without problem against damages to third parties that may arise from their activity. We serve local companies as well as those operating throughout Spain.
We will give you free advice and we will always be at your side to give you the support you need. Contact us, it’s not worth waiting any longer!
