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Security in the case of damage to third parties Commercial third-party liability insurance

Comprehensive basic insurance with individual additional benefits
Financial security for liability claims
Specialist expertise as the largest provider for liability insurance
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Key points at a glance
  • Comprehensive insurance protection: Commercial third-party liability insurance covers the costs for damage you or your employees inflict on other persons or their property.
  • The right insurance for all economic sectors and company forms: This insurance is ideal for all companies that can be held liable for their work.
  • Voluntary business insurance: Commercial liability insurance is not required by law in Switzerland, but it is worthwhile for every company. In some cantons, it is obligatory for certain industries.
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Who needs commercial third-party liability insurance?

Commercial third-party liability insurance has the same purpose as personal liability insurance, its equivalent for private individuals: It protects a company against the financial consequences that may arise if it unintentionally causes damage to its customers or other external persons. It is one of the voluntary types of business insurance, but is worthwhile for every company that can be held liable based on its operational activities. And this could be practically every company, irrespective of its corporate form: From the self-employed and SMEs to companies of every size.

Legal background

In Switzerland, commercial third-party liability insurance is not prescribed by law. However, depending on the industry and its risks as well as the canton, it may ultimately be obligatory. For instance, such coverage may be required for tenders for contracts.

Who is insured?

The insurance covers the operational and professional activity of natural persons and legal entities, partnerships, corporations, and institutions. Business proprietors and all employees, representatives and support staff alike are insured against bodily injury or property damage as well as consequential economic loss suffered by third parties.

What does commercial third-party liability insurance cover?

Within the scope of operational activity, commercial third-party liability insurance covers financial claims that can be asserted against your company based on statutory liability provisions. For instance, maybe a visitor to your premises becomes injured or a defective component is installed and causes water damage to your most important customer. The commercial third-party liability insurance protects you against claims that upon review prove to be excessive or unjustified.

The basic coverage of commercial third-party liability insurance provides protection against the following damages and risks, and covers justified claims from the following:

Insured losses

Bodily injury: This is defined as causing the death of or injury or other health impairments to other people.

Property damage: This includes the destruction, damaging or loss of property belonging to third persons.

Consequential economic loss: This term means financial losses that are the result of insured bodily injury or property damage.

Insured risks

Premises risk: This refers to the risks posed by your property, operating facilities, or premises. Regardless of whether you rent, lease, or own: The responsibility lies with you, if, for example, a non-employee falls down the stairs of your company.

Occupational risk: Losses resulting from operational activity are included in occupational risks. If a technician damages the countertop when installing the dishwasher, it must subsequently be replaced.

Product risk: Regardless of whether a development, construction, production, or instruction defect: If a product made at your company injures or even kills someone or damages or destroys the property of a customer, the damage or loss is insured. 

Incidental risk: Even so-called incidental risks are covered by liability insurance. These include company celebrations and all other company events, cafeterias, and other social institutions for employees, as well as the activities of company clubs and associations. 

Environmental risk: Risks that cause a threat to the environment as the result of a suddenly occurring, unforeseen event are also covered by the insurer. For example, if fuel leaks from a construction crane and contaminates the neighboring property. However, gradual damage that occurs over a long period of time is excluded.

Uninsured risks

The following are generally not covered:

  • Own damage of the company
  • Losses or damages that are expectable and caused by intentional acts, or claims for damage that arises because of a delay or faulty performance of service
  • Pure economic loss

What additional benefits are available?

Operational risks can vary greatly from industry to industry. A car repair shop is exposed to different risks than a hair salon, which is why it is always advisable to obtain a precise risk analysis. This way you can supplement your commercial third-party liability insurance in a targeted way to cover the individual needs of your company.

By supplementing your coverage, you can include special risks in your commercial liability insurance, meaning more comprehensive protection of your company. Here are some examples:

  • Extended insurance coverage in connection with product liability, e.g. for manufacturing and trade, damage due to combining, mixing, processing, and refinement and to cover the costs of expansion and installation
  • Assumption of costs incurred in connection with a product recall
  • Extension of the geographical scope to include the US and Canada so that you are insured in the event of claims concerning the direct and indirect export of goods
  • Protection against financial losses that are caused by your company’s employees due to a criminal or otherwise intentional act, such as misappropriation
  • Extended insurance coverage for environmental impairment caused by your company

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Support and frequently asked questions

  • What is the difference between professional indemnity and commercial third-party liability insurance?

    Both insurance types overlap in some areas. The difference: Companies that can be held liable on account of their operational activity need commercial third-party liability insurance, while professional indemnity insurance is the right solution for those who can be held liable for breaches of professional duty or for pure economic loss caused by their professional activity.

  • Who should take out directors' and officers' liability insurance?

    Policyholder and premium payer is the employer as a legal entity. However,  the de facto directors and officers themselves are covered. So, for example, the board of directors of a joint-stock company, members of the administration of a cooperative, the managing director of a limited liability company, members of the board of directors of associations, trustees, family members of the executive management and senior management (incl. interim management), founders of a limited liability company or joint-stock company, employees who are in a de facto director or officer role or liquidators in the event of a voluntary liquidation. You can find more information on directors' and officers' liability insurance here.

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The right insurance for your SME

Whether liability claims brought by third parties, cyber incidents, or malfunctioning equipment: with SME insurance from AXA, you can be sure that you're covered for the most common risks in your SME – it's simple, easy to understand and available online.

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