Traditional PUBLIC AND PRODUCTS liability policies are increasingly including cover for financial loss as an extension, but what does it mean, do you will need it and, if so are you adequately covered?
When a business suffers financial loss as a resulting FROM the actions of you OR YOUR business, they could file a claim against you, even if indeed they don’t SUFFER PHYSICAL incur injury or damage. Such a claim could easily come across thousands of pounds, which is why you may need cover for financial loss.
For instance, a flooring contractor lays a floor that isn’t fit for purpose and the ground has to be re-laid, leading to the delivery of a new machine to be delayed. The client faces additional costs for storage and transportation of the machine and claims up against the contractor for financial loss. This might be covered by the contractor’s financial loss insurance coverage. Contact professional public adjusters and let us help you fight back.
Does your liability policy include financial loss? Some common liability policies include cover for financial loss, while some don’t or have restrictions set up that limit cover. Here’s a short guide as to the way the mainstream liability policies differ.
So-called unreal financial losses tend to be the consequence of accidental injury or harm to property. Let’s say you accidentally damage a self-employed person’s car. To begin with, this is damage. However, the automobile should be taken to the garage for repairs. During this time period, the owner cannot work. So, she suffers a financial loss which is your fault.
We’ve compiled the main questions and information on the subject of “Income Loss Business Interruption” for you here.
Exactly what does financial loss mean?
A financial loss occurs when someone suffers a primary or indirect financial loss which is your fault. A distinction is manufactured between real and unreal financial losses.
Exactly what is a real financial loss?
A genuine financial loss is when another person suffers a financial loss caused by you.
This is the case, for example, whenever a financial advisor, tax advisor or legal professional gives false advice. Quite simply, a genuine financial loss is not the consequence of harm to property or injury, but an unbiased incident.
Which damages are real financial losses?
Real financial losses occur mainly in a specialist context. Anyone who advises other people as a self-employed person should therefore remove separate pecuniary damage liability insurance. For members of some professions, this is obligatory. These include notaries, tax consultants, lawyers and auditors.
Types of real financial losses in a specialist context:
If a tax consultant misses a deadline and the tax office then levies a late fee, the tax consultant is liable for the financial loss incurred by his client.
If a proofreader overlooks a transposed number in the artwork for a brochure, the complete edition may need to be reprinted. Your client suffers a genuine financial loss because of the proofreader’s mistake.
Examples of financial losses in an exclusive context:
Perhaps you park your car and block the driveway of your self-employed person. As a result, the self-employed person struggles to attend an essential business meeting and also suffers a lack of image. Or he might have to have a taxi to get to his appointment promptly. You then must pay the bill.
Something similar can happen if you block an exit or a garage: You may borrow a commercial vehicle to pick up several pallets of pellets. You unload them in front of your neighbour’s garage and then return the automobile to the rental company. During this time period, your freelance neighbour may struggle to attend an important appointment, thus forfeiting his fee.
In these and similar cases, you will need to compensate for the damage caused.
What exactly are unreal financial losses?
Unreal financial losses will be the result of injuries or damage to property. If a person is injured through your actions, he or she may be temporarily unable to work.
The type of damages are unreal financial losses?
Suppose you are riding your e-scooter and accidentally collide with a passer-by. The passer-by is knocked to the bottom, breaks his arm in the fall and suffers a head injury. To begin with, the incident is injury. However, the injured person can be an independent craftsman. Because of the injury, he’s unable to work for many months. He therefore suffers a financial loss. Since this is a rsulting consequence the non-public injury, it is an “unreal financial loss”.
You might have bought a new wardrobe and are transporting it home yourself from the furniture store in your car. While you unload it, you damage a snack bar trailer that is parked right next to your parking space. The injured party first suffers direct property damage. However, he cannot use his trailer before repairs are completed. You’ll also have to take responsibility because of this lack of earnings.
Your liability insurance regulates the financial loss incurred. Which means that it pays for the financial loss incurred – up to the contractually agreed insured amount.
If it’s an unreal financial loss, your private liability insurance also covers the house damage or compensation for injuries incurred, as well as the f