A partner post by Zurich Insurance
All kinds of risk types
It is not just product defects that can lead to liability claims. Companies can also be faced with liability claims on account of operating processes or defects in buildings and systems, for example if a falling tile damages the car of a visitor. It can get expensive if an employee drills into a water pipe during installation at a company or a waste oil leak contaminates groundwater. Damaged parties are also entitled to compensation in the event of so-called financial and consequential financial losses, for example if sensitive customer or employee data is passed on by accident or rental losses occur on account of construction delays.
Growing entitlement mentality
Enforcing claims for damages by class action suits – of the kind familiar in the USA – is not yet possible in Switzerland. But the entitlement mentality is also growing here. Consequently, a commercial liability policy is indispensable today, although it is only obligatory in a few sectors. This not only applies to companies, but also to freelancers who operate at their own risk. Analogously to private liability insurance, commercial liability covers damage inflicted by the company owner or their employees on third parties.
Liability risks differ widely, depending on the activity of the company. Risks in a factory are very unlike those in a service company. Insurances offer entrepreneurs several modules or additional building blocks for covering operating risks. The entrepreneur – ideally in consultation with their insurance broker – can then identify and cover those risks that they also actually have to expect. This saves insurance costs. There are special insurance solutions for doctors, lawyers, trustees, IT service providers, but also for building companies and commercial companies.
Photo: Zurich Insurance
Supplementary company legal protection
Sole proprietor companies and companies that do not have their own legal department should consider concluding a commercial legal expenses insurance to supplement their commercial liability insurance. Insurance companies recommend this important protection to start-up founders in particular. It not only protects against unjustified claims for damages, but also in the event of disputes with partners or employees.
The insurance not only pays justified claims, but also defends against unjustified claims: A diner at a restaurant may get stomach problems one hour after eating tiramisu. But the reason was not the dessert, it was his new medication.
More information and tips on the subject of third party liability is available at www.zurich.ch