Liability Insurance

D&O Liability

This is one of the complex subjects in Liability Insurances. Professionals like Architects, Doctors, Accountants, Engineers, Valuers and Lawyers are covered under Professional Indemnity policy whereas Directors of companies are covered in D & O Policy in case of any liability occurring. D & O Liability policy covers the following areas:

1. Director’s liability to third parties
2. Defense cost incurred by the director or company for the legal proceedings.
3. Reimbursement of the company if any indemnity is paid in advance.

Errors & Omissions

This is the liability occurring when qualified professionals commit a mistake or offer incompetent service during the course of their service to other parties.

Liabilities in Virtual World

1. Liabilities arising from business through virtual world-e.g A plant compressor is repaired remotely, using virtual reality method, but defect remain due to poor capability of the manufacturer/service provider.
2. Liabilities arising from Virtual World for developers and sponsors for content put up by users, as infringing intellectual property
3. Criminal Liabilities in virtual world for injury to third parties
4. Liability for financial losses suffered by one gamer against another in cyber-space/virtual world where stakes are real
5. Liability suffered by sites buying & selling crypto currencies

Liabilities in Information & Media Operations

Whenever you are in a media business, you face liability due to wrong information, resulting in personal injury to a third party. This policy covers these risks and also those liabilities arising from media technology.

Act Liabilities

This liability is applicable to

• Motor Insurance where the insured damages third-party’s vehicle or causing physical injury to a third party. Insurers will be liable for the damage caused to the third-party.
• Public Liability under the Public Liability Act in India

Damages under Contract

Under the Indian Contract Act, a party who is breaching a contract is liable for damages to the other party. Nowadays, the parties to a contract quantify the damage in the contract itself. Generally, liability insurance policies don’t cover liability under a contract, unless such liability would have arisen outside the contract also.

These policies would respond if there are LDs in the contract and LDs occur due to a fortuity. Normally this cover is given along with other project risks covered for a contractor.  

Liabilities from new Ventures

In any new venture, liabilities are very likely, as there are either two companies unknown to each other come together or a company going into an unknown territory, with quite a few unknown facts.

1. JV partner-cum-operator’s negligence leading to liability of the innocent partner.
2. Business Venture in a foreign company where local laws are not fully known to the Owner, which create liabilities-e.g Oil Pollution Act in the US creating liability for an Indian Oil company having stock/sale operation in the USA
3. Venture in a foreign country without due diligence, resulting in intellectual right violation & court cases
4. A Special Purpose Vehicle (SPV) company formed in Europe by an Indian company to take over a European company landing up with liability claims after take-over, from share-holders of the bought-over company

Product & Completed Operations

Products sold in the market by various industries namely FMCGs, Pharma companies, Electronic Equipment, Tyres etc. are purchased by the consumers with an expectation that it would meet their requirements and function as it is given in the product description. Products inconsistent from the description or ingredients may affect the consumer, which will make the manufacturer/seller liable. This is known as Product Liability.

Comprehensive General Liabilities

This covers the organization from any general liabilities occurring due to bodily or personal injury to a third party, other than product liability or aviation liability (for which separate covers are required), arising in the course of its business.

Aviation Liability

Any liability occurring to the insured in the case of damage to aircraft or damage to third party’s property, Passengers, cargo or luggage carried in the air craft being damaged.

Terminal Operator Liability

This liability indemnifies the insured Ports or Terminals from failure or incompetent operation by the Port terminal which causes loss to third parties-like Ships. An example will be a Port failing to provide adequate facilities for safe berthing of ships or pollution arising from bunkers of a tug owned by the Port.

Employer Liability

This is also formally known as Workmen’s compensation Insurance. This liability arises when employer is liable to pay compensation to employees in case of death or partial disablement or bodily injury to the employee during the course employment