General Liabilities

Liability Insurance

Liability - Concept and Elements
Liability is the obligation to compensate against damages sustained by third parties due to unintended error. Based on this definition, liability materializes by existence of three elements, i.e. error, damage and causative relationship. Though the types of liability are numerous, such as immaterial, penal and civil liability, insurance generally focuses on covering civil liability. In fact, liability occurs upon existence of damage / loss incurred by a third party due to accidental and non-intentional error or omission. Consequently, it is essential for the party causing such damage to remedy it. The third party liability includes the liability for personal acts represented in each error causing damage to third party and the party committing such error is obligated to indemnify it. Also It includes third party liability such as the liability for acts of persons ought to control; like the father’s liability towards the acts of his sons, liability of the master for acts of his subordinates; like the employer’s liability for acts of his personnel. Added to that, the liability arising out of objects such as liability of motor vehicle’s owner for damages caused to third parties by his car.

Liability Insurance Policies
In addition to insurance cover provided under separate policies, liability may also be covered by other insurance policies such as Driving License (Rukhsa), Motor Insurance Policy (Third Party), Marine Insurance Policy (Carrier’s and Stevedore’s Liability), Engineering Insurance Policy (Contractors Liability) and Marine Hull Insurance Policy (liability for collision to third party’s vessels).

Public Liability Insurance
Under the Public Liability Insurance Policy, the Company will pay the sums, which the Insured shall become legally liable to pay as damages are recoverable by any third party resulting from civil liability. The cover may be extended to include immaterial damage, if it is possible to estimate financially, and the attorney fees. Due to the huge indemnity sums usually paid for liability damages, the Company stipulates a maximum limit for liability under the policy held by the Insured. Indemnity is paid for either any one or many events within the limit during the period of insurance, and within the geographical limit agreed upon.

Products Liability Insurance
This insurance covers the Insured (producers – manufacturers – distributors – sellers – repairmen) against legal liability for damage caused by a specific product or commodity. The policy covers include third party’s death, bodily injury and property damage. The maximum limit of the policy varies pursuant to the type of product or commodity. Upon issuing the policy, the Insured should disclose in the proposal form the nature of commodity, purposes of its use, circulation conditions, means of quality control during manufacturing processes and other material facts directly affecting the acceptance of insurance cover. The Products Liability Insurance Policy provides cover for many commodities such as foodstuff, cosmetics, drugs, electric systems, mechanical instruments, chemical products, agricultural chemicals, insecticides, auto, ship and aircraft industry, paper materials, plastic, toys, gases bottled in cylinders industry and other products.

Professional Liability Insurance
This insurance covers the civil liability of professionals such as physicians, engineers, lawyers, insurance brokers and other persons transacting professional activities. Under this insurance, the Company provides insurance against the claims arising out of bodily injuries; death or property damage sustained by third parties due to professional errors (malpractice) whether caused by the Insured himself or by any of his assistants. The Medical Malpractice Liability Insurance Policy issued by DIC is one of the salient forms of this insurance as it indemnifies for the liability exposed to by the various staff working in medical professions such as physicians, radiology technicians, laboratory technicians, pharmacists, nursing staff employed by the various hospitals and medical centers. The cover includes cases of sickness or death of any patient caused by physician’s error during the medical treatment, pharmacist’s error in preparing or issuing the medicine required for treatment or death of patient due to conducting inappropriate surgery.

Liability Insurances Exclusions
The cases excluded by liability insurances vary in accordance with type of insurance cover required. However, there are some general exclusions such as, but not limited to, contractual liabilities, financial guarantees, penalties and fines, penal liabilities, claims arising out of illegal acts including for instance cursing, slander and defamation, sickness or injuries arising out of work, claims arising out of war and nuclear radiations, claims arising out of acts occurring outside the geographical limit of the policy and damage of property owned by the Insured.

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