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Third-party liability insurance

Third-party liability insurance is an important form of insurance that practically everyone needs. Culpable conduct can expose a person to unlimited claims by others. The insurer defends against such claims where they are unjustified (as with passive legal expense insurance) or pays compensation to the injured party where the claims are justified.

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What does a professional indemnity insurance policy cover?

Whereas liability insurance as a rule only comes into play in the private sphere, professional indemnity insurance covers damage caused by the policyholder in the exercise of his professional activity. In many areas such coverage is prescribed, e.g. for doctors and lawyers. Liability insurance coverage of a commercial company is referred to as employers’ liability insurance.

The payment of damage compensation has been refused. As an injured party, do I have a claim against the insurer?

A direct claim against the insurer exists only in the cases specified in section 115 of the Insurance Contract Act (Versicherungsvertragsgesetz – VVG). The conditions for this are satisfied if:

  1. the insurance policy in question is a liability insurance policy intended to perform an insurance obligation based on the Compulsory Insurance Act (Pflichtversicherungsgesetz – PflVG) (e.g. liability insurance for motor vehicles);
    or
  2. insolvency proceedings have been filed on the insurance company’s assets (or refused for lack of assets), or a provisional insolvency administrator has been appointed;
    or
  3. the whereabouts of the policyholder is unknown.
updated on 05.04.2016

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