The The FaculFaculty of International Business and ty of International Business and

EconomicsEconomics

Third party liability insurance

“I’m not afraid to die. I just “I’m not afraid to die. I just

don’t want to be there when it don’t want to be there when it

happens”happens”

(Woody Allen)(Woody Allen)

insurance

Cosmin Joldeş, Univ. Lecturer

Content:

1. Concept of liability

2. Third party liability - type of coverage

2.1. General third party liability

2.2. Product liability

2.3. Employer’s liability

2.4. Tenant’s liability

2.5. Other liabilities

3. Time coverage (occurrence , claims made)

4. Territory

5. Underwriting information

1. Concept of liability

Liability = responsibility to cover damages caused to third parties, by own fault.

In order to obtain indemnities under the liability policy, it is necessary that:

a) a prejudice to a third party is caused, by act of an insured person or of a property of such person

a) a cause – effect relationship exists between the act/event and the injured person

2. Third party liability insurance

2.1 General third party liability - coverage

Third party liability insurance covers :

• damages for which the insured (legal person) is legally liable, towards third parties :

• material damage• material damage

• bodily injury

Coverage is granted for damages caused by the Insured or its

representatives (employees, delegates etc) by own fault.

2. Third party liability insurance

General exclusions:

Major exclusions:

• contractual liability

• terrorism

• radioactive contamination• radioactive contamination

• damages caused to third parties

• moral prejudice

• consequential loss (loss of profit etc)

• malicious damage

• motor third party liability

2. Third party liability insurance

2.2. Product liability (I):

Coverage :

• material damages and bodily injury caused by the products manufactured / imported / distributed by the Insured, due to the defects of the said productthe defects of the said product

• material damage and bodily injury suffered by the product’ beneficiary

2. Third party liability insurance

2.2. Product liability (II):

Definition of product :

• any goods manufactured, produced, built, repaired, installed, processed, modified, maintained, tested, sold, supplied or distributed by the Insured ( including the packaging and labelling) and which is not in the possession of the Insured at the time of the occurrence/ accident.the time of the occurrence/ accident.

2. Third party liability insurance

2.2. Product liability (III):

The following can be considered Insured under this policy :

• manufacturer of the product

• any person / entity which is presented as producer / manufacturer, by labeling the product with its name, brand or other distinctive mark

• any importer of a good with destination of selling, rental, leasing or any other form of distribution.

2. Third party liability insurance

2.3. Employer’s liability:Coverage :

• indemnity for the amounts which the Insured is liable to cover following prejudice caused by its own fault to the employees.

• Bodily injury suffered by the employees and / or material damage to their property

• The event should be related to the working process and should • The event should be related to the working process and should take place during working hours.

2. Third party liability insurance

2.4. Tenant’s liability:• Insured = any private or legal person who has a rental contract

concluded with a third party.

• Coverage provided for damages caused to the rented property, for which the Insured (Tenant) is liable.

2. Third party liability insurance

2.5. Other liabilities:• Directors and Officers liability

• Motor third party liability

• Professional liability

3. Time coverage

a) “claims made”

coverage for damages which are reported during the validity period of the policy, even if they are a consequence of events produced before the inception date. A retroactive date should be agreed by the Insurer.

b) “ occurrence”

Coverage for damages occurred within the period of validity as well as their consequences, if it can be proved without doubt that the causes of such consequences can be placed within the period of validity of the policy.

4. Territory

a)Insured’s premises

b) Romania

c) Romania and other countries, where the Insured operates

d) USA & Canada, as well as countries / territories with similar d) USA & Canada, as well as countries / territories with similar legislation are usually excluded

5. Underwriting information:

• Specific questionnaire for each type of liability

• Annual reports and other financial documents may also be necessary

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