Property damage liability: You should know that!
the essentials in brief
- Is a compulsory insurance for lawyers and tax consultants as well as all advisory professions
- Generally useful for all occupations that advise, execute, certify, manage, audit or supervise
- Coverage is important and should be adapted to the risk – prescribed in some industries
- Reverse insurance protects against claims from contracts in the past
Table of Contents
The liability insurance is an insurance, which is responsible for the claims for damages of third parties. For the law stipulates that guilty parties who inflict harm on third parties must replace it. The financial loss liability is a special liability insurance, which occurs in asset cases. It is an elementary protection in the case of advice and planning mistakes, which otherwise could lead to ruin in case of doubt. Entrepreneurs and freelancers who advise others on business and conduct asset transactions for clients should avail themselves of the asset liability.
Real pecuniary losses can arise through various situations: loss of profit or other financial disadvantage, for example. False or total lack of advice can cause high levels of harm that customers suffer as a result. As a result, even personal injury can be added. An example is a tax consultant who missed the deadline for submitting a client’s tax return. Once the deadline has been postponed, the tax office will not allow another postponement. Now a surcharge for the delay is due. The client will not want to accept the contract and demand payment from his tax adviser. This can assert the damage from the property damage liability. The damage can be significant if an architect has made fundamental mistakes in the planning of a house. Under certain circumstances, it can lead to the demolition of the new building and, in addition, the housing costs, which have now additionally been incurred by the building owners. These examples quickly reveal the benefits for the insured person.
For whom is a financial loss liability relevant?
For all jobs that advise, execute, certify, manage, audit or supervise, insurance is essential. The possible sums of damage can completely ruin the affected two parties and destroy the existence. Auditors, appraisers and even translators can get into such a situation. For some professions, the insurance is also mandatory. Even in the IT industry, customers are required to provide evidence before doing business with their service providers. Doctors, notaries and engineers, but also caretaker can do such a damage.
Typical occupations for the insurance are:
- tax consultant
- Management consultant
- IT service provider (also programmers)
Property damage liability insurance at a glance
The base rate usually includes:
- Costs for lawyers
- Defense against unauthorized claims
- Check the operation for authorization
If a real financial loss has occurred, the settlement of the damage takes place after all circumstances have been examined. The agreed coverage amount of the insurance is the highest possible amount that can be paid for it.
This should be known before concluding the insurance
First, the examination of tariffs regarding the excess very important. The insurance companies offer different sums to choose from. As a rule, the “deductible per insured event amounts to 10% of the first € 5,000 liability charge, then 2.5% of the excess to € 45,000 (see § 3 section 4 AVB-WB). Unless otherwise agreed, the deductible is limited to 1,500 euros. “
Also, the coverage is very relevant: Experts advise you to always secure the higher coverage in order to always be financially on the safe side. The size of the coverage should be set individually, so there are no generalizations in this respect. However, the law requires coverage of some occupational groups, which must be at least one million euros. This applies, for example, to lawyers or tax consultants.
If you handle rather small orders, even 100,000 euros can be sufficient. Best estimate the chances and risks of your orders. In case of doubt: always choose the higher coverage amount.
Very important is the comparison of the numerous offers. For this, insurance portals are the right address. Here not only the benefits, but also the costs of the individual insurance offers are compared. The different reports of experience can also be helpful and, above all, show negative examples.
Tip: reverse insurance
It may happen that damage from an order that was concluded before the conclusion of the contract is not yet known. In order for such cases to be taken into account, you should agree a so-called reverse insurance upon conclusion of the contract.
The property damage liability is not liable for these damages
- Liability claims that exceed the statutory amount
- Damage that is knowingly caused
- Losses in the cash management due to incorrect cash settlement
- Damage caused by embezzlement of the staff
- Own damage suffered by the insured person
- Fines and fines are not accepted
That costs a property damage liability
The contribution to be paid is calculated individually and depends on the following criteria:
- Number of employees
- Your annual sales
- Your chosen deductible
In addition, the insurance company considers the level of risk with which you can harm other companies. If the risk is higher, you have to offset this with higher contributions.
Unless otherwise agreed, the contribution will be paid once a year. However, shorter periods or one-off amounts for temporary risks are also possible. The first contribution is due immediately after receipt of the insurance policy. Meanwhile they are whole Simple insurance with deductible already available from 6.50 euros per month.
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