The general liability insurance (public liability insurance, conventional product liability insurance) provides insurance cover for obligations to pay compensation, which are asserted against the policyholder by the injured party/parties for bodily injury or property damage or resulting financial losses on the basis of legal liability provisions under private law. In such cases, the liability insurance provides for the defense against unjustified claims and the settlement of justified claims.
Usually, a liability insurance consists of five elements of contract:
- General provisions,
- Premises risks,
- Product liability risks,
- Environmental liability and
- Environmental damage insurance.
The general provisions consist of contractual clauses that apply to all elements of contract. This also includes a company description, a list of insured persons and companies and also the uninsured risks (exclusions).
The second part focuses on premises risks, for example risks of property-ownership, the operation of fork lift trucks, processing machines and the general legal duty to maintain safety etc.
The third contractual part deals with conventional product liability risks, and governs product liability, that is, the legal liability for property damage or personal injury and further losses arising therefrom, caused by a faulty product designed, manufactured or supplied by the business of the insured or caused by work or other services provided by him.
Environmental liabilty insurance provides protection for the legal liability under private law of the policyholder as a result of property damage or personal injury caused by environmental impact, where this environmental impact was caused by or emanated from insured plant and installations or activities.
The fifth contractual part concerns the environmental impairment insurance, and includes insurance cover for the legal obligation under public law governed by the German Environmental Damage Act to restore polluted environments (damage to protected species and natural habitats, water bodies and soil).
The basic product liability coverage can, as circumstances require, be extended. The extended product liability cover provides coverage for financial losses incurred by customers from industry and trade on account of statutory liability provisions, arising, for example, from:
- Combining losses, mixing losses, workmanship defects
- Damage caused during further processing or processing damage (product protection)
- Costs for dismantling and installation
- Damage due to defective machines, and optionally
- Testing costs and sorting costs
Even though insurance cover does not apply to all financial losses (e. g. claims for contract performance or should damages be claimed in lieu of performance), insurance benefits are provided for contractual arranagements that go beyond any legal liability. You can select between different modules:
- Extension of the legal periods of limitation and warranty periods (warranty for defects) – Note: limited in time
- Simplification of the commercial obligation of inspection, notification and rejection of incoming goods in accordance with Section 377 of the German Commercial Code (§ 377 HGB)
- Inclusion of the 'retail chain clause'
As deas client, you benefit from modules which are well beyond common insurance coverage and which are tailored to meet your requirements, for example: recall costs insurance, product liability insurance, environmental liability insurance and environmental impairment insurance. We arrange international insurance programs including DIC (difference in conditions) and DIL (difference in limits) solutions for you that are tailored to fit your individual needs.
In the liability insurance segment, we offer the following insurance coverages:
- Public liability insurance
- Product liability insurance
- Extended product liability insurance
- Environmental liability insurance
- Environmental impairment insurance
- Recall costs insurance
- Product safety, ransom, extortion insurance
- Pecuniary damage liability insurance
- D&O insurance (Directors and Officers)
- M&A insurance (Mergers and Acquisitions)
When a claim is made against a company (legal entity) or against a natural person by a third party by reason of legal liability, the question arises, whether, and if so to what extent, this is justified. This is where a liability insurance comes in handy, if it was taken out for the respective risk (e. g. public liability or personal liability insurance).
Insurance coverage includes examination of the liability question, defending against unjustified claims (so called passive legal protection function) and your indemnification against justified claims for damages.
Note: Liability as such is regulated by law and defined by the legislator irrespective of any existing insurance coverage, for example in the German Civil Code (BGB), the German Law on Road Traffic (StVG), the German Product Liability Act (ProdhaftG), German Environmental Liability Act (UmweltHG) etc.
Therefore, liability insurance is one of the most important insurances.
There are many types of liability insurance. Here are a few of the essential covers:
- Public liability
- Product liability
- Product protection coverage
- Extended product liability coverage
- Environmental liability
- Environmental impairment
- Recall costs
- Product safety/ransom/extortion (kidnap for ransom)
- Professional liability
- Motor vehicle liability
- Ionizing radiation liability
- Financial loss liability
- Prospectus liability
- Cyber crime
- D&O Directors and Officers
- M&A Mergers and Acquisitions
The insurance benefits are always defined in the respective insurance contract. In general, the insurer pays for the examination of the liability question and defence against unjustified claims irrespective of the agreed limit of indemnity. This also includes, among other things, expenses for lawyers, experts and court fees. An exception to this is made for any loss or damage that has occurred in the USA or Canada.
In addition, the insurer pays indemnification against justified claims for damages within the limits of the agreed sum insured, or in case of several claims within the limits of the remaining sum insured. From every insurance indemnification a deductible is subtracted as agreed in the insurance policy.