No matter how careful and organized you manage your business or your day, you may end up causing material damage or personal injury that entails costly damages or legal actions.
The most important benefit of a liability insurance is that it pays compensation to individuals or companies for such risks. Liability insurance is divided into mandatory insurance by law and optional.
Mandatory liability insurance is:
- Motor Third Party Liability Insurance (MTPL-RCA). Car owners, both individuals and legal entities are required by law to have MTPL. The police cover the damages of the injured party following a car accident for which you are responsible. Groupama’s MTPL in addition to the mandatory component offers the following advantages:
- time efficiency: you can buy the policy online and in case of an accident you can make the claim online
- direct settlement: Groupama pays for the repair of your own vehicle
- Professional Liability Insurance required by law for certain professions such as doctors or pharmacists who need malpractice insurance, for example
- Civil Liability Insurance of Directors and Administrators (D&O) is mandatory in accordance with Law no. 31/1990 for directors and executives of joint stock companies.
The optional civil liability insurances for companies are: Legal Liability Insurance, Professional Liability Insurance not required by law, Liability Insurance of Directors and Administrators (D&O) for categories not required by law. For individuals, the most important are: The tenant’s Civil Liability Insurance against the Landlord and the Property Owner’s Civil Liability Insurance against his Tenants.
Legal Liability Insurance
Third party liability insurance covers extreme situations when you accidentally cause property damage and personal injury or even death in the course of your daily work. The insurance covers the expenses that the company will end up paying to the injured person. Whether it is a beauty salon, an advertising agency, a bakery or a car service, unforeseen situations can always occur and seriously affect the future of the company, from reputation to financial damage.
Examples of situations:
A client was injured in the freshly washed glass door or a tourist / client slipped on the wet floor and fractured his leg. Or a car service that due to a fault in one of the equipment causes damage to a car in the workshop.
These examples of situations can be covered by insurance.
How much it costs?
A liability insurance depends on the chosen coverage limit and the industry of the company. For example, in the case of an office space for a liability coverage limit of 100,000 euros, the insurance premium starts at 160 euros / year (around 13 euros / month).
What risks does it cover?
You have coverage for the risks specific to the field of activity, if the incident is committed accidentally and unintentionally by the insured contractor: material damage, personal injury or death. Groupama covers the costs resulting from an unforeseen incident, up to the amounts provided for in the contract for:
– The amounts that the insured is obliged to pay, based on the law, to the damaged person
– Costs incurred by the insured or the injured party.
Professional Liability Insurance
In any type of business, there is always the possibility of someone making a mistake, by omission or even professional negligence, which could cause financial damage to customers or employees. The professional civil liability policy provides financial support for these moments. A liability insurance policy for professional misconduct provides business continuity when an error is made in a project in the company’s portfolio.
What types of professional liability insurance are?
There are various types of professional liability insurance designed to cover the specific needs of each field of activity. The law requires professions such as lawyers, notaries, doctors, pharmacists, architects, insurance brokers, etc to have a professional liability insurance in order for them to practice in the chosen field.
At Groupama you can conclude Professional civil liability for:
- Architects and engineers in the field of construction
- Accounting, financial audit and tax consultancy
- Legal activities (for example lawyers, bailiff)
- Insurance agents and brokers
- Insolvency practitioners, Evaluators and technical experts
- Service and consultancy activities in information and communication technology
- Medical practice (malpractice insurance)
Examples of situations:
If you are a construction contractor, it may happen that due to a design error, the electrical installation works do not fall within the parameters and you fully financial support the remedy of the problem.
If you provide legal services and do not file a lawsuit in time, you can end up compensating the client who lost the lawsuit.
These examples of situations can be covered by insurance.
How much does it costs?
The premium of a professional liability insurance depends on the field of the company and the liability coverage limit chosen. For example, for malpractice, a family doctor can insure himself for a minimum liability limit of 12,000 euros with a policy value starting at 40 euros / year (around 3.4 euros / month).
What risks does it cover?
This type of insurance fully covers the amounts resulting from culpable acts such as: errors or omissions, unintentional violation of professional duties or negligence, committed during the act of professional service:
- the amounts established on the basis of a court / arbitral award or amicable settlement
- defense costs (court costs and costs of external consultants)
- expenses with compensation limitation services (fees and / or costs required for the services of an external lawyer or consultant, requested in order to minimize the risk)
- expenses for restoring documents
Liability insurance for directors and executives (D&O)
It is a type of insurance policy that helps to overcome undesirable situations when the decisions taken by the management have a negative impact on the company causing damage to customers, shareholders, employees, creditors, state authorities or other injured party. Insurance helps protect the assets and reputation of the person involved or the business.
How much does it costs?
The cost of a civil liability insurance of directors and executives with a liability coverage limit of 100,000 euros can start from 100 euros / year (around 8.4 euros / month).
What risks does it cover?
The risks to which the company is exposed by any action, error or omission, erroneous declaration, breach of duties or negligent act, committed by the insured in the exercise of a management function are covered. The amounts that the company is obliged to pay based on a court / arbitration decision or amicable agreements between the parties involved are fully covered:
- The amounts established as compensation, defense costs (investigation and defense costs)
- Costs related to compensation limitation services (fees and / or costs for the services of a lawyer or external consultant specialized in the field of activity in which you work, requested in order to minimize the compensation)
- Emergency costs (investigation costs and equipment used in emergency situations)
Challenges and difficult moments are part of any entrepreneur’s path – you can’t avoid or predict them, but you can get insured for your business continuity.Take the step for an insured future and write to us at relatii.clienti@groupama.ro or directly on the website https://www.groupama.ro/contact or choose the Groupama network of agencies