A company’s Professional Civil Liability can be engaged by a large number of people or entities: customers, suppliers, third parties, etc. The damage suffered must be attributable to the company itself. It remains to understand what this principle of pro Civil Liability consists of, and how it differs from the RC of individuals. Let’s discuss together several definitions that will be very useful to you if you are looking to hedge your business against this risk.
Civil liability: definition
Civil Liability is a legal concept. Under this very simple rule of law, any person or entity that causes damage to others must repair it. It is which lays the foundations in this matter: “any act whatsoever of man, which causes damage to others, obliges the person by whose fault it happened to repair it”.
This obligation to repair the damage caused also applies to:
- For individuals: for example, if you jostle someone in the street, voluntarily or not, and the person is injured,
- For professionals: for example, a company which, due to negligence or recklessness, would cause damage to a customer. It could for example be a person who slips into a shop.
As a general rule, individuals are covered for Civil Liability by their multi-risk home contract (MRH).
For a person to be held liable, it will necessarily be necessary:
- Damage, whether bodily, material, or immaterial,
- A fault, i.e. a breach of the obligation not to cause damage to others (voluntarily or not),
- A causal link between the two: it is the fault that causes the damage and which therefore incurs liability.
The term “others” refers to a wide variety of people or entities, whether or not they are contractually related to the “offending” person. We therefore distinguish:
- “Extra-contractual” civil liability: when no contract exists between the two parties (limitation period of 10 years),
- Contractual liability: when one of the parties to a contract is liable for its poor performance, or even for non-performance of its obligations (limitation period of 30 years).
Finally, it should be noted that responsibility is not always personal. It can be incurred as a result of damage caused, for example, by a dependent (such as a minor child), a thing, a building, or an animal.
RC is distinct from Criminal Liability, which requires an offense. This cannot be guaranteed by contract.
What is Professional Civil Liability?
As we have seen, a company (or an independent professional / an association) can also be held liable. In this case, it is his professional RC who will play.
In the absence of specific cover (RC pro insurance), the company must itself compensate the people to whom it has caused damage:
Depending on the damage suffered by the victim, compensation may be very expensive, even jeopardizing the sustainability of the company in some cases. The latter will therefore have every interest in subscribing to a specific contract to avoid this risk.
The responsibility of the company can for example be engaged because of an employee, a building (premises, offices…), a material, a product… It will result for example from a fault, from negligence, imprudence, breach of duty to advise…
The potential victims are numerous. In particular, the following may suffer damage attributable to the structure:
- Third parties (who are not bound by any contract with the company).
In general, we distinguish, in terms of guarantees, the Civil Liability of the operation of the RC pro. The first concerns damage caused in the course of operating the business (apart from any performance of a service), where the second concerns, as you will have understood, damage caused during a provision of services or the delivery of goods.
Building companies must also cover themselves for ten-year civil liability, that is to say, insure against defects that could appear within 10 years of the delivery of the construction/renovation work.
What is the use of professional civil liability insurance?
Any company is subject to risks, regardless of its status, size, sector of activity… At any time, even outside the performance of a service, it could cause damage to others, including its own employees.
It will therefore have to cover itself in professional Civil Liability by subscribing to a specific contract, for example with an insurer. As a result, it will not have, in the event of damage caused for example to a customer, to compensate the victim himself: it is the insurer who will assume the financial consequences of the incident.
Of course, the risks are more or less high depending on the entity, but none is 100% immune on this point.
Professional liability can be the subject of a separate contract or be integrated into a more comprehensive cover, which is generally called “professional insurance” (or “professional multi-risk”). Most insurers offer this type of product, which is intended to ensure the property and the activity of the company: insurance of vehicles, premises, liability for operations, etc.
It is possible that the contract provides, in addition to the “simple” RC pro, other additional or optional guarantees, such as in particular the “after delivery” guarantee. The entity covered by such a guarantee may see the insurer compensate the customer who has suffered damage following, for example, the purchase of a product.
The Professional Civil Liability policy taken out should ideally cover all the risks specific to the company: employees, premises, equipment, goods sold, provision of services, etc. This type of contract is highly customizable.
The prices of an RC pro will depend on many criteria. Let us mention in particular:
- The guarantees included in the contract ( competition cancellation, organizer’s liability, etc.),
- The level of coverage (compensation ceiling, deductibles, etc.),
- The specifics of the company: size, turnover, sector of activity, etc.
How to choose your professional RC insurance contract?
Not all professional liability insurance contracts are created equal. The best practice will therefore be to request several personalized quotes, then to make a precise comparison, knowing on what points to put them in competition.
There are many establishments that offer their own contracts. Let us mention in particular the banks and mutual organizations which have specific offers: RC pro craftsman, RC pro trader, RC pro lawyer…
In order to obtain numerical simulations, you will most often have to contact an advisor by telephone. Sometimes it will be possible to fill out an online form and be offered a quote right away. More rarely, you will have no choice but to go to an agency.
Remember that the best RC pro contract will be the one that is best suited to the specific needs of your business/activity at the best price. Don’t settle for just one quote.
In order to quickly obtain perfectly calibrated proposals for your company, think of the RC pro insurance comparator that Réassure me has developed for you. The tool is 100% free, anonymous, and non-binding.
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Once you have received several professional liability insurance quotes, study them on the basis of the following elements:
- The annual pricing,
- The guarantees included (in addition to the RC itself),
- The compensation limit,
- The general level of cover (deductibles, covered damage, etc.),
- The cases of exclusion.
Professional civil liability: the 5 important definitions
In order to choose the best professional liability insurance contract, it is important to understand certain important definitions. These will be useful when you compare the quotes received.
A guarantee covers you against risk. If this occurs (except in cases of exclusion), the insurer will be obliged to compensate the victim, which will be more or less significant depending on the damage suffered by the latter.
The deductible is the amount that, in the event of the occurrence of the risk, will remain payable by the company. This can be fixed (in euros) or proportional to the sums involved (in percentage). It will generally be capped by the contract itself. The insurer will only compensate the victim beyond this amount, within the limit of the compensation ceiling.
The compensation ceiling corresponds to the maximum sum paid by the insurer in the event of the occurrence of the risk. If it is established, for example, at 4 million euros, and all the damage suffered by the victim does not exceed this amount, the company will not have to participate in the compensation (excluding deductible).
An exclusion is a case in which the warranty will not apply. In terms of professional liability, the main exclusion concerns damage caused, for example, by an employee who does not have the qualifications required in view of his mission. Many other exclusions can of course be laid down by the general conditions.
Is professional civil liability insurance compulsory?
Basic, professional civil liability insurance is not compulsory. For many professionals and companies, it remains optional, although it remains widely recommended, regardless of the status, size, or volume of activity of the entity.
Other insurance is mandatory in all cases, such as that which will cover company vehicles, for example.
RC pro insurance is, however, compulsory for certain professions: regulated professions, i.e. subject to their own legal and regulatory framework and to a professional organization which determines (among other things) the conditions of access to a job.
Many professional sectors are concerned. Let us mention in particular:
- medical professions,
- Consulting and legal professionals (lawyers, notaries, real estate agents, bailiffs, etc.),
- tourism professionals,
- Taxis and drivers.
The persons concerned by this compulsory professional RC must therefore cover themselves against this risk, by subscribing to a specific contract, under penalty of sanctions. It may be a professional RC policy alone or a guarantee included in a more comprehensive professional insurance contract.
Construction companies (including micro-enterprises) have a particular obligation, as we have mentioned. They will have to justify, before the start of any construction site, a ten-year RC, subscribed again with, for example, a traditional insurer.