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AZERBAIJAN INTERNATIONAL INSURANCE FORUM Baku, 7-8 of July 2011

AZERBAIJAN INTERNATIONAL INSURANCE FORUM Baku, 7-8 of July 2011. LIABILITY INSURANCE Mandatory by Law or Market Law?. George Koutinas Insurance Expert www.koutinas.gr. LIABILITY INSURANCE Main points of presentation. LIABILITY. PENAL

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AZERBAIJAN INTERNATIONAL INSURANCE FORUM Baku, 7-8 of July 2011

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  1. AZERBAIJAN INTERNATIONAL INSURANCE FORUM Baku, 7-8 of July 2011 LIABILITY INSURANCE Mandatory by Law or Market Law? George KoutinasInsurance Expert www.koutinas.gr

  2. LIABILITY INSURANCE Main points of presentation

  3. LIABILITY PENAL The one who intentionally or maliciously or by gross negligence harms, is punished CIVIL The one who by negligence, error or omission, creates damages is obliged to indemnify NOT INSURABLE INSURABLE - “Laws / Legal system” but also … “Laws of the Market”! - Civil Liability becomes more demanded and more severe!

  4. CIVIL LIABILITY SUBJECTIVE The personwho suffered a damage, has to prove: • The damaging cause / error • The damage itself • The respective link between the cause/error & the damage OBJECTIVE (STRICT) To avoid consequences, the person “by default” considered liable, must prove existence of “another” cause: • Force Majeure (Act of God) • Liability / Error committed by someone else, … In the current legal & socio-economic conditions, most of liabilities are objective (strict)!

  5. PARAMETERS AFFECTING BUSINESS TECHNICAL - Production • Logistics Liabilities SOCIAL Protection of: • Employees - Consumers - Competition - Environment Liabilities LEGAL • Local Laws • Intl Conventions • Contracts Liabilities BUSINESS INTERNATIONAL CONVENTIONS - Legal frame • Globalization • Natural Environment Liabilities ECONOMIC • Financial Risks (Loans, Guarantees) Liabilities COMMERCIAL - Brand name • Competition Liabilities

  6. LIABILITY INSURANCEBusiness environment & LiabilitiesLIABILITYCONSEQUENCESINSURANCE POLICY - Bodily Injury / Death- Moral / mental suffering againstEmployees EMPLOYER’S LIABILITY - Bodily Injury / Death - Material Damage - Consequential loss against Consumers / Third Parties • PRODUCT LIABILITY - PUBLIC LIABILITY - Earth Pollution - Water Pollution - Damage to Biodiversity ENVIRONMENTAL LIABILITY againstEnvironment - againstClients - againstShareholders, Public Authorities, … - THIRD PARTY LIABILITY- PROFESSIONALINDEMNITY- PRODUCT RECALL - DIRECTORS &OFFICERS Financial Losses In the contemporary legal - institutional framework, Liability is becoming more and more strict!

  7. CORPORATE - BUSINESS LIABILITY

  8. LIABILITY INSURANCEWhat Insurance Policy covers?

  9. LIABILITY INSURANCEAt what Indemnity Limits? General easy answer can not be given. To determine the optimal efficiency (benefit / cost) need: Golden Rule: “Buy enough to feel safe as far as you are able to pay the insurance cost"

  10. EMPLOYER’S LIABILITY Key criteria of Insurability

  11. EMPLOYER’S LIABILITY • Employer is “by default” liable (strict liability) • Safety Engineers/“OS&H” Firm may be liable

  12. PRODUCT LIABILITYCase of Manufacturing & Trading CONSUMER The Trader / Supplier as well as the Manufacturer have an “Objective” Liability versus the Consumer TRADER or SUPPLIER MANUFACTURER / PRODUCER • CERTIFICATION BODY • MESUREMENTS & QUALITY CONTROL LABORATORY The Laboratory of Measurements / Controls and the Certification Body have a “subjective” Professional Liability

  13. ENVIRONMENTAL LIABILITY Each and every Business activity that may causes damage to the environment will bear the cost for the proper preventive measures as well as the cost to limit the damage occurred and to establish the damaged environment at the prior situation(Directive 2004/35/EU The “Polluter Pays Principle”) Basic characteristics

  14. PROFESSIONAL LIABILITY(Errors & Omissions Insurance) Main Professions concerned

  15. LIABILITY INSURANCE Mature markets

  16. LIABILITY INSURANCE Immature – emerging markets Mandatory by Law or Law of the Market?

  17. LIABILITY INSURANCE Why is it necessary

  18. LIABILITY INSURANCE Advantages

  19. LIABILITY INSURANCE Conditions to be positive

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