What Is Civil Liability?
Civil liability is very much part of everyday life as civil matters concern ordinary citizens, their rights and their protection.
In its simplest terms, civil liability means the responsibility for actions and practices that could damage others, but which aren’t criminal. They are therefore not pre-meditated or against the law. Instead, civil liability concerns the times when there isn’t any intention to cause harm, but harm occurred anyway. If you’re a business owner, this might mean having a faulty piece of equipment that injures someone or doing a piece of work that’s judged to be unsatisfactory.
In cases such as the above, the person affected might decide that you bear civil liability for whatever has gone wrong and attempt to claim damages. This can leave you open to compensation payments, not to mention legal costs and also your defence costs. Furthermore, if a court concludes that you have lost the case, you may have to pay the claimant’s expenses too.
Is There Anything You Can Do To Protect Yourself Against Civil Claims?
As a business owner where you provide advice to your customers, Professional Indemnity Insurance is a necessity to cover yourself against claims made against your business, which will also cover legal costs and compensation.
However, not all Professional Indemnity policies are created equal which means that you need to be aware exactly of what your policy does and doesn’t cover. At the heart of professional indemnity insurance lies the distinction between policies that deal with negligence only, and those that offer full civil liability. It might not sound like much, but it makes a world of difference and it affects whether or not your business is covered for a claim against it.
A Matter of Negligence
Negligence only policies are attractive due to the fact that they are cheaper, but that is only because they cover less. A negligence only policy only covers what’s defined in the policy wording. In other words, if a claim is not specifically included, its excluded. Among other differences, it means cover is restricted. Depending upon which level of cover you’ve opted for, they’ll only cover compensation and legal fees up to that limit.
Full Civil Liability
With full civil liability, if a claim isn’t specifically excluded, its included. That means that if you’re found liable for compensation, damages or costs in a civil court because of your advice or professional services, you’re covered – even if you can’t see that you are. This matters because rules and regulations change all the time and new acts of parliament are passed almost on a daily basis. A full civil liability policy gives you cover for the risk you didn’t know you faced.
Plus, there’s another benefit. Legal costs are handled separately to any compensation due. And that means you’re covered for anything spent on your defence up to the same threshold as the overall policy – it doesn’t come out of a combined fund that also pays out compensation and is treated independently.
You Are The Judge
Only you can judge how likely it is your business will be on the receiving end of a civil claim. However, now you know what civil liability is, as well as why it’s relevant and what a civil claim entails, it’s a good idea to remember that the type of professional indemnity insurance you buy has important consequences, and is just as significant as the level of cover you choose.
If you require any further help and advice on what insurance you may need, please get in touch with a member of our team to talk to one of friendly experts.
Posted by Jess Brown on April 24, 2019 in News, Professional Indemnity Insurance |