Public liability insurance
The business liability insurance (common abbreviation in Germany: BHV) covers the liability risks of tradespeople and industrial companies, freelancers and craftsmen. In some cases, this group of people has a statutory obligation to provide financial security.
Benefits of the insurer
The insurance cover includes the exemption of the policyholder from justified statutory claims by third parties for damages . It also includes checking whether and to what extent these claims are justified and defending against unfounded claims. In this respect, liability insurance is a passive legal protection insurance : in Germany, the costs of the examination and legal protection are borne by the insurer, regardless of the agreed sum insured. However, the insurance cover only applies to claims aimed at compensation for damage, not to those aimed at the fulfillment of contractual obligations or which have other objectives such as information or the omission of certain actions.
The insurer regularly pays the injured party, not the policyholder. The latter cannot dispose of his claim for exemption from the insurer ( Section 156 (1) VVG ). Payment can only be made to the policyholder if, for example, the claim for compensation has expired due to offsetting or performance. This plays a major role in manufacturing processes based on the division of labor, particularly in the construction industry, for example, via offsetting.
Scope of insurance
In addition to the sole trader or the sponsoring company, the persons who manage a company or a branch are also insured ( Section 102 VVG), as well as all other employees who work for the employer in the course of their professional activities. By securing the liability risks of the employees, their right to indemnity under labor law is also taken into account. Claims of the policyholder against co-insured persons or between co-insured persons are not subject of the BHV. In Switzerland, claims of co-insured persons are also insured with each other, in Germany this is also covered in many coverage concepts of various insurers. In the event of an accident at work as part of a commuting accident, the statutory accident insurance compensates the employee's damage, whereby the liability claims against the injuring employer or colleague for compensation for personal injury to the extent of the accident insurance benefits are deemed to have been settled. In the case of freelancers and commercial subcontractors, the insurers regularly limit their liability to the liability of the principal and expressly exclude the liability of the subcontractor or (vacation) representative: he should take care of the appropriate provisions himself. Risks that arise after the insurance contract has been concluded are provisionally covered by the pension insurance, but require final inclusion.
Exclusions and Inclusions
The "General Liability Conditions" have been modified over wide areas by the "Special Conditions" customary in the industry, mostly in favor of the policyholder. For all business customers, clauses such as damage occurring abroad or damage to property in their custody (including building land) must be included. The regulations on occupational damage are also regularly changed in favor of the policyholder. The customary quality assurance agreements between the individual stages of production are often used to relocate the purchaser's incoming inspection required by commercial law to the supplier, who is exposed to increased liability risks. Such “supra-statutory liability commitments” can also be secured. But since every company has an individual need for security, only professional information can ultimately provide security. In addition to the insurers themselves (through authorized directors, agencies and other field service), numerous credit institutions and often insurance brokers specializing in individual professions offer these services.
The main exclusions are those of pure financial losses and performance claims:
Pure pecuniary losses are losses in which neither a person is killed or injured nor an object is destroyed or damaged. In this way, an inadequately newly manufactured thing is not damaged, even if the components contained in it are destroyed as a result of their uselessness. The further manufacturing costs, like lost profit and disposal costs, are pure financial losses. Pure financial losses are regularly insured in public liability insurance, but with the regular exception of those that can be traced back to a delivery or service by the policyholder.
Claims for the fulfillment of contracts or claims for compensation taking their place are not claims for damages and in AHB no. 1.2 excluded for clarification.
Mandatory for certain professional groups
A professional liability insurance applies particularly responsible professional groups as a prerequisite for commercial approval. This is especially true
- freelance medical professionals and veterinarians
- Architects or civil engineers
- as a member of the legal and tax advisory practice such as lawyer , auditor , tax consultant , notary as well as the insurance broker in the context of financial loss liability
There is also a distinction with regard to the forms of business liability insurance, which are primarily available from industrial companies, including in the area of
- Environmental liability
- Commercial and industrial liability ,
- the product liability
- as well as manager liability or D&O insurance for managers and organs of a company
Business and product liability insurance
Anyone who not only supplies products to end consumers, but also produces them, is exposed to the risk that their products will cause financial losses beyond direct damage that are not adequately covered by "conventional public liability insurance". Such damage can be the result of wasted processing or manufacturing costs as well as the costs of replacement or even recall campaigns caused by defects in individual components of the end products. Such risks are only covered by the “conventional business liability insurance” for the co-insured personal injury and property damage. A product liability insurance can therefore be recommended for commercial intermediate producers.
A business liability insurance expressly excludes insurance cover for financial losses resulting from the violation of third-party property rights . This risk is covered by patent liability insurance .