Liability Insurance
2026 update: voluntary liability insurance covers only those property interests, types of liability and events that are expressly stated in the contract. Before purchasing, check the circle of insured persons, limits, territory, deductible, exclusions and the procedure for submitting claims.


Liability Insurance

There are the following types of liability insurance:

1. Third-party liability insurance
This policy protects the policyholder's property interests connected with obligations arising from causing harm to the life and health, as well as the property, of third parties. The cover applies to claims for damage caused by the insured company or its employees.

2. Product and services liability insurance
This type of insurance is aimed at compensating losses and damages arising from claims brought against the policyholder by a user, consumer or other person who has suffered harm or damage as a result of defects in the goods it has manufactured and sold.

3. Employer's liability insurance
This type of insurance protects the property interests of a policyholder who is liable for harm caused to employees in the performance of their work duties.

Insure Your Liability


Liability insurance can be used to compensate damage that you have caused to someone. Damage in this case means harm to health, life, movable or immovable property (that is, if you broke, flooded or spoiled something, or someone suffered from your unintentional actions; the list of situations is not limited).
There are two main categories of liability insurance:
  • liability for causing harm: this type of insurance is needed by people who fear that their careless actions may cause the very damage described in the definition above;
  • liability for improper performance of a contract: this type of insurance is used in the same kinds of cases in business.
Insurance against causing harm will come in handy if, for example, you were doing renovations and flooded the neighbours below. Damage can be of different kinds. For example, in the case of flooding there may be not only direct victims, the neighbours, but also indirect ones. If you also flooded the premises of an amateur theatre one floor below, the audience will be upset by the cancellation of the performance. However, they will not be able to demand money from you for moral damage; at least in our country that is how things stand, whereas in some other countries you would have to compensate indirectly affected persons as well.

How to Insure Your Liability

1. Choose an insurance company
First you need to choose an insurance company that holds a licence for liability insurance. When choosing an insurer, compare the tariffs of different companies.
2. Collect the documents
The second stage is collecting the necessary documents. The list of documents will depend on the specific type of insurance and the requirements of the insurance company. For example, for a compulsory motor third-party liability (MTPL) policy you will need a passport, the vehicle registration certificate, a valid technical inspection coupon and a driving licence.
3. Find out the cost of insurance
The cost of insurance is usually calculated individually. It depends on the amount you will be compensating and on the term of the contract. In voluntary insurance you can choose the amount of compensation yourself, but the larger this amount, the larger the premiums you will have to pay.
4. Find out in which cases you will receive a payment
Find out and clarify what the contract treats as an insured event, whether the whole amount or only part of it will be reimbursed in each particular case, and whether the contract includes any additional paid services. Do not forget to look at the general liability insurance rules the company operates under, so that you understand exactly what you are buying.
5. Pay attention to the number of events and risks
The company may set not only a maximum payment amount but also a limit on insured events or types of risk. Check how many times you can flood your neighbours; perhaps your insurance will no longer cover the fifth or tenth occurrence.
6. Find out when the insurance will not work
There are exceptions to the insured event. You will not be paid if the insurance company or the injured parties prove that you acted intentionally or under the influence of narcotic substances.
7. Check the additional conditions
Additional insurance clauses can be added to the insurance contract. For example, the contract can provide that the insurance will cover the services of a lawyer in the event of a lawsuit or an expert examination if the court needs one.
If all the terms of the contract are clear to you and acceptable, all that remains is to sign it and pay the first premium; usually the insurance begins to apply from that moment, unless the contract provides otherwise.

What You Need to Know About Liability Insurance


Scope of the insurance
Under a liability insurance contract you cannot insure unlawful interests, that is, interests that contradict the law and may cause harm to other people.
Responsibility
Insurance does not relieve you of full responsibility for the damage caused. Yes, the injured party will receive material compensation, but you may also face criminal or administrative liability. Moreover, the insurance company compensates damage only up to the sum insured; if the harm you caused is valued at a larger amount, you will have to pay the difference.
Legal capacity
If a person is declared legally incapacitated and a guardian is appointed, all rights and obligations under insurance policies (for example, property or life insurance) pass to the guardian. In the case of liability insurance, however, the incapacity of the policyholder means that the contract automatically terminates.