A civil liability insurance, also known as CR, has the objective of protecting the company or the self-employed from claims for damages caused to third parties or their property. It is the lifeline that a large number of companies and professionals have so that, in the event of an unforeseen event, they do not have to respond with their assets, but it is the insurance that covers these contingencies.
Although liability insurance is only compulsory for those engaged in certain activities (e.g. lawyers, architects or individuals and legal entities providing health services), in practice, this coverage is advisable for the vast majority of companies and self-employed professionals.
Of course, a plumber’s liability coverage will vary greatly from that of a designer or a doctor. Just as a chemical handling company will not require the same protection as an educational institution.
PIB Group Iberia is dedicated to advise our companies and freelancers in the choice of the best liability insurance for their activity, since in addition to the liability of the activity itself, there are many other factors that influence with specific coverages. Here you will find all the information about our liability insurance.
In this article we review the types of liability insurance by sector to understand the characteristics of each one of them. Let’s get started!
Professional Liability Insurance
It protects against material, personal or primary patrimonial damages (these are the economic damages not derived from a material or personal damage) that may be caused by a professional or a company to a third party in the rendering of services. An example would be that of a lawyer who misses the deadline for filing taxes and the damage is a penalty to his client.
These insurances are intended to provide coverage for possible negligence committed by the professionals in question, and that harm clients or affected third parties.
Normally (not always), it is contracted in fully regulated activities, which have Professional Associations around which liability insurance is usually offered. These are some of the most common ones:
– Liability insurance for lawyers
As stated in the Statute of the Spanish Bar Association, “lawyers in their professional practice are subject to civil liability when, due to fraud or negligence, they damage the interests whose defense has been entrusted to them”. The Bar Associations usually have their own collective civil liability insurance, which the lawyer can extend depending on his circumstances.
More information in: Is liability insurance necessary for law firms?
– Liability insurance for physicians
The legislation obliges health professionals practicing in the field of private assistance, as well as legal entities or privately owned entities that provide any kind of health services, to have a civil liability insurance. There are some companies specialized in offering these CR insurances to doctors, dentists, pharmacists, veterinarians, physiotherapists or nurses.
– Liability insurance for architects
By law, architects are responsible for projects for ten years. Although liability insurance is only compulsory for architects in some autonomous communities, in practice, the vast majority of architects take out insurance to ensure that their backs are well covered.
– Liability insurance for engineers
Responding to third parties for damages arising from the exercise of the engineering occupation can be very costly, which is why most technical and senior engineers protect themselves with Civil Liability insurance.
– Other professional services
However, there are other professional services that, although not as regulated, also require insurance to protect their activity.
We are talking about consultants, photographers, designers, masseurs, teachers and, in general, self-employed professionals who cannot risk having to respond with their own capital to third party claims.
These professionals are less strictly regulated, but it is no less important to have liability insurance. If you are sued by a client, how are you going to defend yourself, are you going to pay compensation and legal costs? These are questions that a professional liability insurance policy will solve for you.
Each activity, of course, has its own specific coverage. Therefore, our role as an insurance brokerage is to help you find the policy that really covers your activity, comparing the most specialized companies in your sector. Because an engineer’s insurance should not cover the same as that of a designer or a photographer.
2. Liability Insurance for Technology Companies
Also known as ICT CR insurance, these policies are an example of how insurers are adapting to new needs. In this case, to the protection of the ever-increasing number of professionals and companies involved in IT and technology.
Even though they have risks in common with other companies, eminently technological companies -such as marketing agencies, web design, programming, hosting or software commercialization- need coverage completely adapted to their activity.
The ideal in this type of companies is the combination of civil liability insurance with a cybersecurity policy, due to the leverage they have in technology. Thus, if they suffer or cause damage that is not the result of negligence committed by the company’s personnel, but of a computer attack, it is the cyber insurance that must respond.
Today, the risk to companies’ computer networks has become the most important for them, and the ransom demanded in ransomware (data hijacking) incidents has risen from tens of thousands of dollars to several million.
Do you want more information? Don’t miss our analysis on the Best Cyber Risk Insurance.
3. CR insurance for industrial companies
Industrial liability insurance is specially designed for companies engaged in the manufacture, handling or storage of products.
We can understand that the risks of companies in the automotive, logistics, chemical, textile or food sectors, to give just a few examples, have nothing to do with what we have seen so far. In fact, their activity can cause much more serious material or personal damages than the previous ones and therefore the coverage and the risk is much more focused on them.
Some common coverages in this type of policy are claims, product and post-work liability, criminal defense or employer’s liability (damages suffered in an accident at work by the workforce).
Depending on their activity, it is highly recommended that industrial companies also have environmental liability insurance… Especially depending on the raw material used (chemicals, for example) and their location (being in the middle of an esplanade is not the same as being next to a river or a mountain).
4. Liability insurance for construction companies
In construction, the risk is more than evident, due to the difficulties that this task entails both at a technical and execution level. As in the case of industry, the risk is eminently of generating material or personal damages.
These policies are tailor-made for developers, construction companies or subcontractors engaged in building or civil engineering. Due to the magnitude of these insurances, in many occasions companies offer two options: a policy per work or a general policy, which covers the company for all the works they do per year.
5. CR insurance for installers
Let us take the example of a plumber: in his activity, the risk is concentrated in the possible material damage that he may cause by his activity. The installation works are very varied, from plumbing, gas, heating or air conditioning to solar panels, elevators or high and low voltage electrical works. For this reason, each type of installer has its own compulsory insurance that must be presented to the relevant authorities, and the coverage must be adapted accordingly.
6. CR insurance for educational companies
Academies, schools, universities and any training center have a responsibility that we wanted to extract from the previous areas we have seen. And the fact is that each of them performs different activities, but they have in common that they concentrate a large group of people in a single place, so that the sum insured contracted is an important factor.
To get an idea of the degree of specificity of these liability insurance policies in the education sector, some companies offer protection against claims for damages suffered by students in the event of bullying due to the negligence of the school in not ensuring their safety. They also cover other risks such as penalties for failure to comply with the Personal Data Protection Act, which is so important nowadays.
If you want us to help you find the insurance you need, do not hesitate to contact us.
