There are certain terms and concepts in the insurance industry that may be difficult to understand for those who do not come from the sector. However, if you are a businessman or manager of a company, it is necessary that you understand well several concepts to be able to make appropriate strategic decisions and contract the insurance solutions to protect your company and investment.
There are several business insurances, here are the most common and that you should have contracted to correctly protect your company and activity:
– Activity Liability Insurance
– Multi-risk Insurance
– Worker’s Accident Insurance (compulsory)
– Cyber Risk Insurance (not compulsory, but companies with websites and e-commerce are highly recommended)
In this post we will explain what Business Activity Liability Insurance is and what it is for and give examples of claims that would be covered by this insurance.
We are C1 Broker, insurance brokers, and we have specialists in business insurance to be able to advise you correctly, with the most complete coverage and at the best price.
The Activity Liability Insurance in Portugal
This insurance serves to cover third party claims for injuries, damages or losses that have occurred due to the activity of the company.
In some cases, this insurance is compulsory and without it the company will not be able to exercise its activity legally or to present itself to certain public tenders. For example, if your company is a travel agency, you will need liability insurance in order to have your licence and all your papers in order. Or if your company is a software company, certain contracts with public entities or large business groups require the existence of an Activity Liability policy.
Examples of claims for Business Liability Insurance
Here are some examples of accidents or claims that may occur in the course of a company’s normal business activity and which, through carelessness, lead to claims that may bring unexpected expenses to the company.
Software company “Countplus” in Lisbon: When “Countplus” installed a new invoicing programme in the database of a client, an error in the script erased all the records in the client’s database. This client had to hire a team of external IT specialists to work for 48 hours to be able to restore the lost data and put his system back as before in order to operate. The customer claimed these costs and losses from “Countplus” and also compensation for the days he could not operate. This claim will be covered by the civil liability insurance that “Countplus” has contracted.
Company of wedding dresses confectioner in Oporto ” White Company “: The “White Company” accepted an order to make 10 bridesmaids dresses and the wedding dress for the Silva family. Due to a mistake by the “White Company”, the dresses were not sent to the correct address and ended up being held up at the post office unable to be used on the Silva family’s wedding day. The client was very disappointed and had to look for an alternative and after the ceremony, he claimed costs and also compensation because he did not receive the dresses. This claim will be covered by the activity liability insurance that the “White Company” has contracted.
Iron Cookware Company “Round Company” in Caldas da Rainha: The “Round Company” accepted an order to produce 10,000 cookware for a large supermarket. When delivering the boxes of iron pans, the worker from the “Round Company” left the boxes on some wooden pallets at the entrance of the supermarket’s warehouse, without realising that the boxes were obstructing the opening of the automatic gate. When the supermarket manager arrived, he opened the warehouse gate and the automatic gate system got tangled up in the boxes, damaging the motor. The supermarket had to pay 3,500 euros to replace the gate motor and claimed the costs from the “Round Company”. This claim will be covered by the activity civil responsibility insurance that “Round Company” has contracted.
The Activity Liability insurance should not be confused with the company’s multi-risk insurance
Business multi-risk insurance covers the place where the business activity takes place, for example, the company headquarters, warehouse, office, shop, restaurant space, etc… These insurances are called “multi-risk” because they have various covers included, for example they insure the capital of the building, the capital of the contents (for example, computers, furniture, machines, raw materials) against various scenarios… theft, fire, flooding…
These multi-risk insurances also include a civil liability cover which is related to the damage caused by elements of the building, contents or even the property itself. For example, a customer visiting your shop or office is injured because a lamp came loose from the ceiling and fell on his head. The medical costs and any compensation this customer may have will be covered by your liability cover.
Some examples of claims covered by multi-risk insurance would be:
Fire at the software company “Countplus” in Lisbon: A fire broke out in the area where this company has its rented offices. The fire burned the furniture, computers, servers and copies of projects that they were preparing for a client. The damage amounts to more than 150,000 euros in company materials alone. The multi-risk insurance will cover 100% of this damage.
Flooding in the wedding dress factory “White Company” in Oporto: A pipe burst over the weekend caused the basement in the dress factory to flood. The rolls of silk fabric became wet and faded. The damage is more than 25,000 euros. The multi-risk insurance will cover 100% of this damage.
Theft at the Iron Pans “Round Company” headquarters in Caldas da Rainha: On Saturday night, the company’s office was broken into and the thieves took the computers and broke into several cupboards. The damage amounts to 5,100 euros. The multi-risk insurance will cover 100% of these damages.
Accident at the software company ” Countplus”: While visiting, customers of the company slip on the freshly mopped floor and get hurt. The customers decide to file a claim for medical expenses.
As we have seen, there are several accidents that can happen in the course of a company’s normal activity. Activity civil responsibility insurance and multi-risk insurance are important insurances to protect your company from unexpected expenses arising from claims related to accidents or claims.
At C1 Broker, we are experienced insurance brokers in Portugal and Spain and are able to diagnose your company’s real needs. We will find the most complete coverage at the best price. We work with more than 25 national and international insurance companies, such as Zurich, Liberty, Allianz. Victoria, Fidelidade and much more… to find always the right solution for you and your company! Contact us today.