Liability Insurance

A general liability insurance (also: “WA insurance’’) is an insurance that protects individuals from financial liabilities, resulting from accidents that have led to damage and/or injuries.

In other words: when you (accidentally) cause injury or damage to someone else, you are liable. The other person or party can reclaim his or her financial loss (damage) from you. With a liability insurance, the insurer will reimburse the ‘victim’ for the costs of the damage caused.

Two types of liability

General liability can be divided into two types of liability; personal liability and risk liability.

In the case of personal liability, a person can be held responsible for damage to another person’s possession(s) or injuries to another person. For example: If Mark accidentally breaks Linda’s vase during a visit at her appartment, Mark can be held responsible, thus liable for the financial loss of Linda’s vase. Assuming that the vase was worth €150, a liability insurance would cover this damage and Linda would receive €150 from Mark’s insurance company.

Apart from personal liability, a liability insurance also involves risk liability. With risk liability, people are protected from damage to others, caused by an unforeseen accident which is not caused by the person him- or herself. For example: Mark returns from his vacation and discovers that one of his water mains burst and caused water damage to his neighbour’s house. In this case, Mark cannot be held personally responsible for the damage. However, Mark can be held liable because the unforeseen accident can be seen as his risk, resulting from a water main burst in his house.

Despite the fact that a personal liability insurance is not obligated in the Netherlands, it is highly recommended to take out a liability insurance.

A liability policy usually covers a sum insured up to 1 million euros, but some insurers even offer insurance products that include sums insured up to 2,5 million euros.

Who is insured with a liability insurance?

When a person takes out liability insurance (aansprakelijkheidsverzekering), this often covers other family members as well. In most cases, children are automatically included in the policy. Pets are also generally included but there are a lot of differences between insurance companies. Because of this, it is highly recommended to compare different liability insurers and thoroughly inspect the conditions and the policy in general.

Grey areas

Despite the fact that a liability insurance is handy and advisable, there are a lot of so-called ‘grey areas’ in which it is arguable whether or not the insurance company will compensate in case of an accident. Because of this, it is very important to examine the policy terms and conditions.

What is covered with a liability insurance?

  • Material damage resulting from accidents that damaged or destroyed another person’s personal belongings.
  • Medical costs, resulting from accidents that resulted in injuries.
  • Legal procedures such as a court case/lawsuit or research that is executed by professionals.

Note: Every insurer has taken the ‘accident-condition’ into their insurance policies. This condition states that there is no protection (coverage) for situations in which there was question of damage caused on purpose.