What business liability insurance protects
A liability policy compensates for harm that a company may cause to third parties in the course of its activity: the life and health of visitors and passers-by, the property of clients, neighbours and counterparties and, in some programs, their financial losses. Instead of the company, the insurer pays the claim within the limit; as a rule, the costs of defence in court and expert examinations are covered as well. Such protection is needed by manufacturers, trading and service companies, contractors, owners and tenants of buildings, event organisers, and anyone from whom it is required by customers, landlords or tender documentation.
Main types of cover
- General civil liability — harm caused in the course of activity or in operating territory and premises.
- Product liability — harm from defects in goods produced or sold.
- Professional liability — errors and omissions in providing services: design, consulting, valuation, IT services, medicine.
- Employers' liability — employees' claims in excess of compulsory insurance.
- Directors' and officers' liability — claims against managers for management decisions.
- Contractual liability — within the limits the insurer is willing to accept, for example to a landlord for damage to leased property.
Some types of liability in Kazakhstan are insured on a compulsory basis: liability of owners of facilities whose operation involves a danger of causing harm to third parties, environmental liability, the carrier's liability to passengers, and the liability of audit organisations and private notaries. A compulsory policy covers only the requirements of the law, so it is often supplemented with a voluntary one with broader cover.
What is usually not covered
- intentional harm and knowing breach of the law;
- fines, penalties, forfeits and other sanctions that are not compensation for harm;
- damage to the property of the policyholder itself and its employees, unless separately included;
- obligations assumed under a contract in excess of those established by law, unless specially agreed;
- gradual environmental pollution, asbestos, nuclear risks;
- claims and circumstances known to the policyholder before the start of the contract.
What determines the price
The main factor is the type of activity and the severity of possible harm: an office company and a chemical plant are not comparable in risk. Taken into account are turnover or the volume of work performed, the number of staff and sites, the geography of operations and sales markets, including export markets, the claims history, quality control and safety measures, the limits, the deductible and the chosen extensions of cover.
How to choose a program and what to check in the contract
- Limit of liability — the aggregate for the whole term and per claim, and sublimits for harm to life, health and property. It must correspond to the scale of possible claims and to counterparties' requirements.
- Trigger of cover. Whether events occurring during the insurance period are covered, or claims made during that period. For professional liability, the retroactive period — cover of errors made before the contract was concluded — and the period for reporting claims after its end are important.
- Territory — where an event may occur and where a claim may be brought.
- Deductible per claim.
- Legal costs — whether they are within the limit or covered in addition to it, and whether the insurer's approval is needed.
- Compliance with contracts — the wording that customers insist on, and including them as additional insureds.
What to do when a claim is made
- Immediately report the event or the claim received to the insurer within the period stated in the contract.
- Do not admit fault or promise compensation without the insurer's approval.
- Collect evidence: reports, correspondence, photos, witness statements.
- Pass to the insurer copies of the claim, the statement of claim and the court documents.
- Agree the defence strategy and the settlement procedure.
How Polis Re helps
The broker reviews the company's activities and contractual obligations, determines which claims are realistically possible, selects a combination of compulsory and voluntary policies and checks that the wording meets customers' requirements. For a preliminary calculation use the liability calculator; for compulsory types there are calculators for owners of hazardous facilities and for environmental insurance. We will select a program for your activity on a request to the broker.
