Insurance lines expertise > Protecting liabilities
You will need liability protection in case you or your company is held legally liable for damages made to the third parties. There are lots of various liability insurance lines, but the most common are:
General and Product Liability
General and Product Liability insurance provides indemnity for liability arising out of damage to a third party person or property, or environment in relation to Policyholder’s business operations, property ownership, as well as product manufactured or services rendered.
Professional Liability (also known as Professional Indemnity, Errors & Omissions, Fiduciary Liability) indemnifies against claims for the negligent act, error/omission, breach of trust, breach of fiduciary duty, breach of professional duty, misrepresentation and any other form of “professional negligence”, except of dishonest, fraudulent, criminal or malicious acts. Professional Liability insurance is dedicated for the auditors, medical doctors, notaries, architects, insurance brokers, etc. Many of these Professional Liability covers are compulsory in the Baltics.
Directors and Officers Liability (D&O)
Directors and Officers (persons in charge of executive decisions) of the Company can be claimed for damage made to the third parties for wrongful act committed in their managerial capacity. If the case if brought to court, defence costs can reach huge amounts – even if defence is successful. Directors & Officers (D&O) Liability insurance is dedicated to pay any awards, costs or settlements for which an insured Director or Officer is legally liable resulting from a claim for any wrongful act, as well as defence (legal) costs.
D&O Liability policy comprises of two sections:
Section A. Directors & Officers policy indemnifies the Directors and Officers in respect of claims made against them where the Company is not permitted to reimburse them
Section B. Company Reimbursement policy indemnifies the Company in respect of claims made against the Directors or Officers of the Company where the Company is allowed to reimburse the Directors and Officers
D&O Policy can be extended to cover Employment Practice Liability, i.e. allegations of wrongful employment practices: failure to promote, discrimination, sexual harassment, unfair dismissal, etc.
Employer’s Liability insurance covers claims for damage to Insured’s Employee or his/her property for which the Insured is held legally liable. Apart of direct material damage, Employer’s Liability insurance can also cover immaterial damage for mental, etc. injury up to certain limit stated in the insurance policy.
Motor Third Party Liability
Motor third party liability insurance provides coverage for Insured’s liability arising out of damage to a third party person or property, caused by Insured’s motor vehicles.
Motor Third Party Liability insurance is compulsory in Baltics, i.e. every vehicle owner is obliged to have compulsory insurance policy that provides cover up to certain limits required by local laws. Compulsory limits, however, are not always sufficient. Therefore, it is recommended to consider voluntary Motor Third Party Liability insurance that would cover Insured’s liability in excess of the compulsory limits and/or scope of cover (e.g., immaterial damage).
Road Carrier’s Liability (CMR)
Road Carrier’s Liability insurance covers:
Cargo salvage, transshipment, emergency storage costs
Financial loss due to the lost freight in respect of the damaged part of the cargo
Legal and other costs, incurred in the litigation against the claimants
Costs of average adjusters
Cargo insurable under CMR Policy would include goods carried for reward by road vehicles, when the place of taking over of the goods and the place designated for delivery are situated in two different countries, of which at least one is a contracting country. CMR insurance would not cover domestic shipments or own shipments where the carrier is not entitled for reward.
Aviation Liability insurance would cover claims related to the operation of an aircraft (e.g., liability for death or injury to air passengers), operation of airport premises, products or services that are provided and/or intended for flight related activities.
Charterer’s Liability – insures liability of a charterer against the vessel owner and others
Marina Operator’s Liability – insures liability of a marina operator against owners of watercraft while in the marina’s care, custody and control
Shiprepairer’s Legal Liability – insures liability of a shiprepairer for damage to vessels while in the care, custody and control of the shiprepairer
Stevedore’s Legal Liability – insures liability of a stevedore for damage to vessels and their cargo while in the care, custody and control of the stevedore for the purpose of loading and discharging a vessel
Terminal Operator’s Legal Liability – insures liability of a terminal operator for damage to cargo while in the care, custody or control of the terminal operator for the purpose of storage
Wharfinger’s Legal Liability – insures liability of a wharfinger for damage to vessels and their cargo while in the care, custody, or control of the wharf facility
Vessel Builder’s Risk – insures the materials going into the vessel, the completed vessel for physical damage, and the liability of the builder to the owner of the vessel until completed and delivered to the owner
Ship owners and charterers are supposed to maintain P&I (Protection & Indemnity) insurance in respect of third party liabilities and expenses arising from owning or operating ships. The risks typically covered by P&I insurance are loss of or damage to cargo, environmental damage, bodily injury or property damage sustained by passengers and crew, personal injury in the event of collision, costs for wreck removal, and costs for repatriation of stowaways.
Personal Liability insurance would indemnify third parties (e.g. neighbors) for their property damage or bodily injury that was unintentionally caused by the Insured or his/her family member, or a pet. Loss or damage caused by a child (under certain age) is usually covered even if this damage has been malicious.