For most citizens and business leaders, it has become customary to draw up life insurance, car, property insurance contracts. Faced with such a category as “liability insurance”, many do not understand the need for this type of protection. Although, as practice shows, in the modern world, existing types of liability insurance allow you to protect yourself from possible unforeseen expenses when carrying out various activities and even driving. Based on civil law, allocate liability under the contract and the law.
Legal liability
Non-contractual, or tort, or liability under the law appears in case of damage to a person who is not in a contractual relationship with the person responsible for the event. This type of liability occurs regardless of the existence of a signed contractual relationship.
Insurance of such risks requires certain conditions:
- the liability of the insured or another participant who may also be the responsible person is insured;
- all participants who may harm by their actions must be indicated in the insurance document;
- the beneficiary can be both the insured and the insured participants, and third parties, if specified in the insurance contract;
- the injured person has the right to demand the amount of compensation for damage directly from the insurance company, if such conditions are specified in the insurance contract concluded between the parties.
Contractual liability
Responsibility under the contract occurs in case of non-fulfillment, low-quality fulfillment of the duties that are prescribed in the agreement between the parties. This type of liability insurance also requires certain conditions:
- liability is provided for by current legislative documents;
- only liability of the insured is insured, all other contracts are considered null and void;
- the beneficiary under the insurance contract shall indicate the party with which the policyholder entered into a contractual relationship.
Given the legal relationship that arises between the insurance organization and its customers, the insurer assumes the obligation to compensate for property damage or damage to the state of health of third parties.
Types of Responsibility
According to the requirements of insurance legislation, the object of liability insurance defines property interests that are directly related to the policyholder and persons affected as a result of his activities. Legal regulations clearly delineate which types of insurance are related to liability insurance.
For this there is a classification of liability types:
- administrative - arises from an administrative offense or violation;
- material - obliges the employee to compensate for the loss caused to the organization as a result of non-compliance or violation of applicable laws;
- civil law - appears in case of violation of civil legal norms of legislative acts and entails non-compliance with the subjective rights of third parties;
- professional - represents the interests of specialized specialists for possible material damage in the performance of their duties or the provision of a list of services specified by the contract.
The main types of liability insurance, such as civil and professional, are of interest to the financial market.
Liability insurance
A manufacturing enterprise, like an ordinary citizen, during the performance of assigned production tasks or in everyday life through their actions can damage property of unauthorized persons or harm their state of health. Under the law, culprits are obliged to compensate for the losses caused. In order to minimize such costs, insurance companies have approved types of civil liability insurance contracts.
When signing an insurance policy, it should be borne in mind that civil liabilities are exclusively of a property nature. Existing types of liability insurance offer to transfer the possible losses to the insurer. At the same time, it must be understood that the existence of such an agreement does not remove the possible administrative or criminal prosecution from the insured.
Based on the norms of insurance legislation, the following types of liability insurance are distinguished:
- vehicle owners;
- freight carrier;
- owners of industrial companies, organizations that as a result of their activities relate to high-risk facilities;
- owners or tenants of hydraulic structures.
Professional liability insurance
Some types of professions are classified as unsafe activities, as an employee can harm the client by his actions. It is possible to cause property losses during the low-quality provision of services or performance of work, unfair performance of professional duties. The material losses that will be incurred by customers can be reimbursed by the insurance organization if the perpetrator has a policy.
Existing types of professional liability insurance are tied to the occupation of the future client of the insurance company. Such professions as a notary public, private doctor, customs broker, appraiser, auditor are required to have an insurance document among the permits, thanks to which the responsibility for future errors and shortcomings will be transferred to the insurer.
Responsibility of Car Owners
Among the existing types of civil liability insurance, the most demanded is a mandatory motor citizen. This agreement gives the driver the right to drive a vehicle. Insurance companies offer both voluntary and compulsory types of liability insurance. On a voluntary basis, the client of the insurance company may increase the liability of the insurer in the event of a traffic event.
With the entry into force of the system of "direct loss settlement" in the presence of an MTPL agreement, not only the culprit of the company, but also the injured client is entitled to receive insurance compensation from his insurance company.
The insurance premium is calculated if the owner of the insurance document became the culprit of the accident. This type of compulsory liability insurance assumes payment not only for damaged property (cars, houses, electric poles, fences), but also for damage to the health of passengers or other participants in a road event.
In order to receive insurance compensation or accrue payment to the injured party, a number of conditions must be met:
- the car is driven by the person specified in the insurance contract;
- moral damages are not compensated;
- the vehicle does not participate in the rally, for studies or competitions;
- the deliberate unlawful actions of the insured;
- driving while intoxicated, under the influence of drugs or opiates.
It should be noted that there are two types of compulsory insurance of civil liability of car owners: domestic and international agreements. To travel abroad, the driver of the vehicle is also required to insure his liability. To this end, there is a Green Card agreement, thanks to which a unified insurance policy is valid in the territory of 31 states. The amount of obligations that the insurance company assumes depends on the state in whose territory the emergency event occurred. The insurance contract extends to all persons who are driving a car specified in the policy.
Responsibility of the Appraiser
Another type of liability insurance, which is mandatory, legally approved is the liability of the appraiser. In carrying out his valuation activities, he may inadvertently inflict material losses on his customers. In order to minimize the losses of this profession, upon receipt of a permit to conduct valuation activities, an insurance agreement with a specialized financial company is mandatory.
The payment of insurance compensation for this type of compulsory liability insurance is carried out by a court decision. It is also possible to compensate for the losses caused by the client if the insurer agrees that the insurance event actually took place without waiting for a judicial act. The insurance amount is paid to a third party. The amount of payment depends on real material losses, but it cannot exceed the insurance liability of a financial company under the terms of a contract.
Carrier liability
Among the existing types of compulsory liability insurance, attention should be paid to liability insurance of carriers of goods by road, sea and air. The main regulatory documents that determine the size of insurance liability and fees are international conventions on the carriage of goods and domestic legal framework.
This type of carrier liability insurance is mandatory in order to protect consignees or passengers from possible violations as a result of the delivery of cargo or baggage or harm to their state of health. Insurance compensation is paid to injured persons or beneficiaries in the amount of property losses actually incurred, the cost of treatment or upon death.
Responsibility of companies - sources of increased danger
The activities of some enterprises and organizations initially represent a danger, based on the work that they carry out. So, refueling with lubricants and gas can create an emergency as a result of a gas leak or explosion of containers. Nuclear and power plants are also mandatory for such hazardous facilities. The owners of such enterprises are required to have an insurance agreement with a specialized company, which assumed responsibility for losses directly related to the insured's production activities.
According to the provisions of the current civil code, dangerous sources include:
- mechanical devices, equipment, the operation of which cannot be completely controlled;
- human industrial activity related to atomic, nuclear, electrical energy, easily flammable and explosive substances.
The presence of an agreement on this type of liability insurance allows the head of the hazardous facility to transfer the amount of losses to the insurance company for such events:
- damage to property or its complete destruction;
- failure to receive planned profit;
- moral damage;
- health problems or death of affected people;
- expenses for the elimination of the results of the insurance event.
Broker Liability Insurance
In order to carry out the work of a customs representative, a prerequisite is the inclusion of a potential broker in the register of customs representatives. Based on the approved types of compulsory liability insurance, insurance companies offer insurance policy execution, without which a customs broker cannot be registered in the register. Its availability is mandatory.
Insurance organizations take responsibility to cover property losses incurred by the customs representative through their actions, or inaction associated with the implementation of a specific set of works. In addition to damage to property, the insurance document may cover the costs of litigation by lawyers and invited specialists.
An insurance event is considered to have taken place upon presentation by the client of the broker of property claims that are directly related to the poor quality of services, namely:
- failure to comply with the deadlines for the provision of customs documents;
- incorrect calculations of customs duties that are paid in an overestimated amount;
- fines for violation of the procedures for clearance of goods through customs;
- disclosure of commercial information or other data of a confidential nature.
Auditor Liability Insurance
Another type of liability insurance is insurance auditors. To carry out audit activities, the current law provides for the obligatory existence of an agreement with an insurance company. The various types of liability insurance contracts that insurance companies offer their customers also include compulsory liability insurance for auditors.
During the course of their activities, specialists may, through unintentional actions, cause property damage or damage to the state of health of the customers of the services. Insurance events include:
- an error in the assessment of activity and its compliance with regulatory documents;
- incorrect interpretation of audit results;
- failure to detect significant deficiencies in financial documents;
- non-compliance with the approved accounting and reporting standards, tax legislation;
- accidental loss or damage of financial documents, which include payment orders, declarations, checks, tax invoices and payment invoices.
For this type of liability insurance, the insurer reimburses the amount of fines imposed. The services of another audit company are also payable if the loss was caused by unprofessional actions of the auditor whose liability is insured. In case of loss of documents, the insurance company compensates for the cost of processing new documents, notarized copies. In addition, if money is spent during clarification of the circumstances of the event, such expenses are also subject to compensation from the insurance amount.
The financial services market, like the entire insurance industry, is under development. And if property risks, or even the general concept and types of liability insurance, such as compulsory motor liability insurance, are familiar to most consumers, then only a narrow circle of specialists is closely confronted with voluntary liability insurance. Although the presence of such a contract allows you to protect yourself from additional material costs in case of the event specified in the contract.