Professional liability insurance in the EU with English-speaking experts

What is covered by professional liability insurance?

Professional liability insurance or corporate liability covers the costs of investment, building, personal, property, and financial losses and defends against unfounded claims from third parties. The most claims result from: advice error, wrong diagnosis and therefore wrong treatment, review errors, coding errors, estimation error, calculation error, measurement error, loss, analysis error, instruction error, and missing deadlines.

Professional liability insurance covers the financial loss that other people may incur resulting from the business activities of the insured. This includes property damage and personal injury, but in many professions, professional liability insurance is financial loss liability coverage.

Anyone who makes mistakes during their freelance or self-employed work, for example, by missing deadlines as a lawyer, making an incorrect diagnosis as a doctor, or making a planning error as an architect, must also pay compensation to the affected clients or patients. These claims can quickly run into the millions and, without cover, threaten the client’s financial status. Professional liability insurance is required for business-related activities that is tailored to typical claims in the respective profession.

There are professional groups that are obliged by European law or by the requirements of their professional association to have sufficient professional liability insurance. These professions include, for example:

  • Insurance brokers
  • Property managers
  • Tax consultants
  • Lawyers
  • Doctors
  • Engineers
  • Auditors
  • Architects

They have high professional risks and can cause major damage through even the smallest mistakes.

This insurance is not mandatory for other professions but recommended because all freelancers and self-employed persons are liable for any damage they cause, and without insurance, this can be expensive in the event of a claim. For example, freelance journalists are liable for damage caused by incorrect information in an article. Similarly, interpreters may be liable for damage caused by an incorrect translation. Programmers and developers for wrong code, etc.

Sicher Sicher has deep knowledge and experience in covering the following professions:

  • Doctors and paramedics
  • IT-Companies
  • Insurance brokers and underwriting agents
  • Engineers
  • Craftsman
  • Business Consultants

Tip: Product liability insurance can be included with various insurers as a supplement to public liability insurance. For example, manufacturers or wholesalers who do not sell their products to end users may need extended product liability insurance. This extended product liability insurance covers the costs incurred by the purchaser if the product is defective. Extended product liability insurance only covers so-called pure financial losses. This refers to losses that do not arise from personal injury or property damage.

FAQ. Professional liability insurance:

1. Can employees be held liable for damage?

According to § 619a BGB (German Civil Code), employees can only be held liable for damage incurred if they are responsible for the damage. The burden of proof lies with the employer. The employer must demonstrate and prove that the employee acted intentionally or negligently.

2. How are employees insured against liability in the professional liability insurance?

Employees who work regularly for a company do not normally have to worry about professional liability insurance. As a rule, the employer is liable for any damage they cause. Employees should have their own professional liability insurance if they work as freelancers, next to their employment, even if it’s an occasional activity. This part-time work is generally not covered by the employer’s insurance.

Furthermore, professional indemnity insurance for employees is particularly useful if they hold management positions. This applies to board members, managing directors, or members of the supervisory board. They can be held directly liable and should therefore have appropriate insurance; in the examples mentioned, they would need manager’s liability or D&O (director’s and officer’s) insurance.

3. Who is liable if a work laptop breaks down, does the professional liability insurance pays?

Who is liable for damage to work equipment? If the employee damages work equipment such as a laptop, company cell phone, or similar, he or she is only liable in the event of intent or gross negligence. In the case of medium negligence, the employee may be liable proportionately; in the case of slight negligence, the employer bears the full amount of the damage.

4. When is a claim grossly negligent, according the terms & conditions of the professional liability insurance?

A person is grossly negligent if they have breached the duty of care to be expected of them under the overall circumstances to an unusually high degree and disregarded the consequences that should have been obvious to anyone in the given case.

5. How high are the sums insured?

As in all insurance contracts, a sum insured is also specified for professional liability, for which the insurance pays in the event of a claim. In professional liability insurance, separate sums insured often apply for property damage, personal injury, and financial loss. As professional liability insurance is mandatory for many activities, the minimum sums insured are often set by law.

Corporate & Professional Liability Claim Examples:

Missing a project deadline

A company is not able to meet a delivery deadline due to a loss of production caused by damage and must pay contractual penalties.

Commissioning external companies

During renovation work, the policyholder commissions a plasterer as a subcontractor. The plasterer damages the fence of the adjacent property at the customer’s business premises. The policyholder is liable for the damage caused if he has not taken out commercial liability insurance with an insurer.

Damage caused by work

A plumber repairs a sink at a customer’s home. The sink cracks because the fixing screws are tightened too much. The business liability insurance covers this damage and the associated costs – provided that the business is the policyholder and is insured with business liability insurance. If the company does not have business liability insurance, it will have to bear the financial consequences – because in this case, it will have to pay the customer for the damage itself.

A craft business causes groundwater damage due to the release of pollutants.

Loading and unloading damage

A craft business receives a delivery of building materials. When unloading the materials, the fitters help out and damage the door of the delivery van while lifting the materials out. It’s good that the company has liability insurance, because in this case the damage is covered by the business liability insurance – without insurance cover, the company would have to bear the liability for the damage itself.

Fire claims covered by the liability insurance

A fire caused by the business spreads to surrounding houses.

A cable damaged during the exposure of a house connection causes a short circuit and a power failure in a neighbouring business.

Business liability insurance offers the following benefits:
  • Protection in the event of personal injury (e.g. medical treatment costs, compensation for pain and suffering)
  • Protection in the event of property damage (e.g. repair or replacement costs)
  • Protection in the event of financial loss as a result of personal injury or property damage (e.g. loss of earnings, loss of profits)
  • Coverage for third-party claims for damages (assessment of whether claims are justified or excessive)
  • Coverage for environmental damage (e.g. contamination of groundwater by pollutants, spreading fire)
  • Pays up to the agreed sum insured for justified claims.

In addition, you can supplement your insurance cover with additional modules and we tailor it to your individual needs.

This product can be purchased in the above mention countries with a EU- or Worldwide coverage including and excluding USA & Canada.
Please describe it as precisely as possible in order to receive a suitable offer that meets your needs. It prevents potential exclusions from insurance coverage in the event of a claim.
With your website, we can better classify risk-relevant activities.
The sums insured apply to personal injury, property damage, and consequential financial loss. We offer higher insurance sums in the industrial insurance sector.
The turnover forms in addition to the other risk questions for the premium calculation.
For a more precise risk calculation, you can use the dimensions below as an example: Managing director/owner = GF 1; full-time employee = VZ 2; part-time employee = TZ 3; mini-job = MJ 1.
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With over 23 years of expertise in the global insurance market, we have accumulated a comprehensive portfolio of corporate insurance to ensure our clients are adequately and suitably covered at all times. As brokers for VIP-private, commercial, industrial, and specialty insurance, we are constantly aware of emerging risks and work with clients and the insurance provider to create new coverage concepts that introduce cutting-edge innovations to the insurance industry.

Some examples of these include our robot insurance, car insurance, restaurant insurance, Error & Omissions insurance, Amazon insurance clause, or health insurance for foreign nationals residing in Germany that includes all vaccinations, mandatory long-term care insurance, and coverage for pregnancy and childbirth expenses.