The Liability Insurance is one of the most complex insurance sector, and where you have to take into account several parameters in addition to the price before I hire him .
Next we are going to analyze the 7 most important sections of Civil Liability Insurance :
The real activity of the company and secondary activities if they exist should be reflected as best as possible.
As in other insurances, a franchise is set for certain coverages, the amount of which, in the event of a claim, will have to be paid by the client.
Practical example: A claim of € 10,000 is declared, and we have a € 600 excess in our Civil Liability Insurance . The Client will pay the injured party the first € 600, and the company will pay the rest, € 9,400.
Certain activities are required by LAW to contract a minimum capital for Civil Liability Insurance , according to the Autonomous Community.
For example in the Valencian Community :
– According to the capacity, for Public Shows, Recreational Activities and Public Establishments, article 60 of Decree 143/2015 .
– Certain industrial activities such as installers, among others, the Department of Industry, Commerce and Innovation requires a minimum coverage capital, according to the CERRESCI document .
SUBLIMITES PER PERSON
It is the maximum amount with which the company will compensate in case of physical damage per person.
Practical example: Suppose we take out Civil Liability Insurance with a capital of € 300,000 but with a sub-limit of € 150,000 in the coverage of RC Exploitation, and we do physical damage to a third party.
At most, the company will compensate with € 150,000.
Recommendation: Contract products that do not apply sub-limits per person or at least reflect € 300,000 for this sub-limit, since after the approval of the new scale of injuries in traffic accidents in 2016, compensation has increased considerably, in some cases almost quadrupled.
Although the aforementioned scale is for injuries in traffic accidents, it is used by the vast majority of judges when calculating compensation for Civil Liability Insurance .
THE TEMPORARY SCOPE
The temporal scope on Liability Insurance we explained in detail in an article in our Blog. Although the article deals with Professional Civil Liability insurance, it is equally valid to understand this concept for all types of CR insurance, qualifying that the temporal scope in General Civil Liability insurance is mostly based on the occurrence or period of discovery.
- RC Operation / Activity
- Employer’s RC or Work Accidents
- CR Crusade
- RC Subsidiary of Subcontractors
- RC Post-Jobs
- Product CR
- RC Union and Mixtures
- RC Product Recall
- CR for Damage to Entrusted Objects
- RC Professional
Specific coverage by type of activity / sector
For example, among others:
- RC Testers in the automotive sector.
- RC Cloakroom in the hospitality sector.
REGULARIZATION / UPDATE
Every year, a few months before the expiration of the Civil Liability Insurance , the client is asked for information on the calculation basis on which the insurance is based to obtain the price.
Usually it is the invoicing without VAT for the previous year, which is compared with the last invoice provided to the company. But also the data of the calculation base of the Civil Liability Insurance , can be number of self-employed, number of employees, number of students, etc … There are companies that regularize and others that update with this information, or even both.
It is extremely important to provide this calculation base data each year for the regularization of the policy in order to be able to collect 100% of the compensation.
To obtain the regularization receipt, the billing is multiplied, for example, by this rate (per thousand) and said result can never be below a minimum premium that is established when contracting the insurance, and later the premium is discounted portfolio already paid.