What is liability insurance?: Types of liability insurance

liability insurance

This is the compensation received by a person who has been involuntarily harmed by the company. Learn more about the implications of CR.

If you have a company and an employee or client has an accident while performing work activity, civil liability insurance is the one that responds to this situation. Third-party claims for damages generally merit compensation and will depend on the type of damage caused. This is exactly what is covered by Civil Liability, also known only as RC.

Civil Liability insurance guarantees appropriate coverage without affecting the company’s assets or operations. For this reason, it is one of the most important policies for a company and, also, one of the most sold.

Now, let’s take a closer look at what liability insurance covers.

According to the law, what is CR?

Following article 1903 of the Civil Code, every person is required to answer for himself or for all those for whom he must answer when damages are caused to third parties. According to the article 1902:

“Whoever by action or omission causes damage to another, intervening through fault or negligence, is obliged to repair the damage caused.”

Those who respond for others vary according to each case, such as parents for children, guardians forwards, directors and companies for their employees, and so on. So, the concept of Civil Liability or RC can be defined as financial compensation in case of damage to third parties, and even in some cases, requires a response in court disputes.

And what is professional RC?

Professional Civil Liability is that which derives from errors, negligence, or omissions in the execution of the professional activity that has caused damage, personal or material economic damage to a client or third party. In these cases, you must also respond with an indemnity or compensation.

This policy is especially important for premises (we recommend you read our article on insurance for rented premises ), consultants, law firms, and offices.

What are the types of RC for companies?

Like everything, it will depend on each case and the need for coverage. Whether you hire yourself for a self-employed person, a small company, or a business.

  • self-employed

These policies provide protection when there are damages to third parties that derive from commercial activity. The coverages vary according to the requirements and the activity of the person. They may include bail, legal costs, derivatives, personal defense and claim for damages, claims in supply contracts, and defense before the labor inspection, among other services.

  • SME

The CR for SMEs provides coverage for damages to third parties when they are the product of business activity. These insurances cover indemnities and derived defense expenses and also protect the owner and the employees when a third party is affected by the professional activity.

  • Directors and Administrative (D&O)

The coverage protects the personal assets of managers and administrators in a company and manages the economic consequences in the face of possible defense processes. These insurances generally protect directors of investees, as well as subsidiaries created and acquired during the insurance period.

So, what is an RC policy for?

Damage to third parties can mean financial compensation, or in the case of not reaching an agreement, a legal confrontation. In both cases, the payment of a large amount of money may be required that affects the wealth of a person or the assets and capital of a company.

To be able to respond without going bankrupt or surrendering savings and assets, it is best to have an insurance policy that responds on a case-by-case basis. At Zurich Companies, there is a variety of insurance designed for you, among which you can find civil liability insurance. 

What is the price?

You can calculate the price of your insurance at any time. Too easy. Click and fill in the form with your company details. It will only take you 1 minute.

Remember that each type of civil liability has a different cost and everything will depend on the type of insurance and the coverage you choose. For our part, we are always at your disposal to answer any questions you may have.

By aamritri

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