Is liability insurance mandatory?

Everyday life is full of unexpected events. And liability insurance is essential whenever there is a possibility that your profession or activity could cause harm to others.

What is the purpose of liability insurance?

In other words, this insurance provides essential protection that guarantees compensation for damages caused to third parties that may be attributed to you in the course of your business activities. Thus, this insurance serves two main purposes, namely:

• damage caused accidentally in the course of their work;
• and damages resulting from the direct performance of their professional activities.

Thus, the liability insurance It is typically prepared in a business context by independent professionals, companies, or organizations with certain responsibilities. This plan may also be requested outside the workplace by individuals, provided that there is the risk of causing property damage or bodily injury to third parties.

For example, People who engage in activities such as hunting or installing gas appliances are legally required to purchase this insurance. This plan is also purchased to allow you to drive your car or in cases where damage caused by a pet is a possibility.

When is it mandatory to have liability insurance?

Although this plan is comprehensive and optional, it is important to note that liability insurance is mandatory in certain situations.
According to the Insurance and Pension Funds Supervisory Authority (ASF), this insurance is mandatory for the following activities:

• Professional and recreational activities;
• Entities, agencies, and services
• Licenses;
• Transportation.

What does liability insurance cover?

The scope of this insurance varies depending on whether it applies to a professional or personal activity, and it varies among insurers.

In general, the main types of coverage under liability insurance may include the following situations:

• damages caused to third parties in the course of professional activities;
• damage caused by a property where an activity is taking place, or by equipment in use on the premises;
• protection for work performed both inside and outside the company that is related to professional activities;
• damages caused to consumers by defective products;
• and insurance coverage required by law depending on the type of activity.

In addition to this coverage, you can add other types of protection to your insurance policy if you consider them relevant to your profile and line of work, as subject to the insurer's approval.

What types of liability insurance are there?

In addition to coverage options, you can also choose the type of insurance that best suits you and your business. To that end, insurance companies offer a range of different options, such as:

• Commercial Liability Insurance: covers damages caused to third parties by the company's facilities and operations;
• Family Liability Insurance: Protects against unforeseen events that could affect family stability and covers damage or injuries caused by any member of the household, whether adults, children, or pets.
• Environmental Liability Insurance: Covers liabilities arising from environmental damage, including the costs of measures to prevent and remedy such damage.
• Product Liability Insurance: Covers liability arising from damage caused to third parties by a defective product.
• Business Liability Insurance: Covers non-contractual liabilities that may legally be attributed to the responsible party for damages caused to third parties.
• Local Accommodation Liability Insurance: Covers damage caused to guests, damage caused by guests to third parties, and damage that guests may cause to the common areas of the property.

Does insurance vary depending on one's profession?

Each business sector has different legal requirements, needs, and, consequently, insurance coverage. For example, a construction company does not need coverage for food poisoning.
Thus, although the companies share a common coverage base, It is important to choose the type of liability insurance that best suits the practice of the profession.

That's why you can find insurance for:

• Events: Provides coverage for companies in the event of damages resulting from accidents unintentionally caused to third parties during an event.
• Food service establishments: prevention of food poisoning caused by food prepared and consumed on the premises;
• Tourist accommodations: provide compensation for damages caused by laundry services or the theft of items and money stored at the front desk or in safes;
• Construction: Provides coverage against losses caused by construction activities and related businesses;
• Clinical services: provides coverage against liability for damages caused to third parties, including compensation for acts or omissions in the practice of the profession;
• Engineers: Covers the payment of compensation for property damage caused to third parties, provided such damage results from acts or omissions committed in the course of their professional activities;
• Directors: Covers the civil liability, as provided by law, of members of the management and supervisory bodies of commercial corporations.

How do I choose an insurance policy?

Now that you have a better understanding of this plan, it’s important to know how to choose the best liability insurance.

The best insurance for you isn't always the one that includes every type of coverage. As we mentioned earlier, insurance coverage and types depend on the industry. Therefore, rather than simply choosing the cheapest or most comprehensive liability insurance, you should first consider your needs, your business, and the various possible scenarios.

This is the only way you can choose the plan that best suits you or your company. That’s why the consultants at EXS Seguros help you Get an insurance quote and provide you with all the necessary information to help you find the most appropriate solution, minimizing the risks and unforeseen circumstances that may arise when selecting a policy.

How do I file a civil liability insurance claim?

If you need to file an insurance claim, you must first report the incident in writing to the insurance company within the time limit specified in the contract or within 8 days of the incident.

The policyholder—who is legally liable for damages caused to a third party—must always report the claim to the insurance company in writing. It must be thorough and provide a detailed account of the cause and effect..

In turn, The amount of compensation depends on the damages caused, but it is limited to the insured amount specified in the contract. If there are multiple injured parties, the amount of compensation remains the same but is divided proportionally among all of them.

If you need help filing an insurance claim, you can contact EXS Seguros; our consultants will assist you throughout the process and answer any questions you may have.

Learn about the insurance companies and plans available through EXS Seguros

In short, The law mandates civil liability insurance based on a specific activity or situation. However, even in cases where this insurance is optional, it is prudent to analyze the risks associated with your business and company and determine whether investing in the protection of your assets is worthwhile.

And at EXS Seguros, you can find the insurance that best meets your needs and addresses your concerns. A plan with different levels of coverage, designed to protect business owners and professionals.

To learn about our offers, use our simulator. Simply enter your information and request a free quote for liability insurance. We’ll contact you to request more information, and based on a comparison of quotes from the most competitive insurers in Portugal (Ageas, AIG, Allianz, ARAG, Caravela, Fidelidade, Liberty Seguros, Lusitania Seguros, MAPFRE, Popular Seguros, Saúde Prime, Tranquilidade, Una Seguros, Victoria, and Zurich), we’ll present you with a personalized quote.

In addition to a free simulation, you can also count on administrative support from our consultants throughout the entire enrollment process and, if necessary, when filing a claim.

So, if you need help, At EXS, we guarantee the support you need to find the solution that best suits you. Contact us!