Public liability insurance: what it covers, what it excludes and how to claim
Types of policy (vehicles and personal mobility vehicles, home and pets, professional liability), the small print worth reviewing before you need it, and the steps for claiming when the insurer disputes or refuses payment.
Public liability insurance is what separates an accident from a financial problem lasting years. It covers the harm you cause to others: to the neighbour downstairs, to a pedestrian, to a client, to a patient. Almost everyone has some policy that includes this cover and almost nobody has read it, so the moment when its real scope is discovered coincides with the worst possible moment.
This guide explains what types of public liability cover exist, what they usually cover and exclude, what to check in the policy wording, and how a claim is made whether you are the injured party or the insured.
What public liability insurance is
It is the contract by which the insurer undertakes to cover the risk that the insured becomes liable to compensate a third party for harm arising from an event provided for in the contract. It is governed by Ley 50/1980, on Insurance Contracts, and it protects two interests at once: the insured's assets and the injured party's ability actually to be paid.
Hence the key element of the system: the direct right of action. The injured party can claim directly against the insurer of the person responsible, without having to sue that person first and without the defences the insurer has against its own insured, non-payment of the premium, for example, being available against them on the same terms.
Cover is compulsory in some cases (the use of motor vehicles, the practice of certain regulated professions, keeping dogs depending on the applicable rules) and voluntary but highly advisable in many others. Its purpose is simple: to protect present and future assets against compensation that can far exceed anyone's savings.
Types of policy
Motor vehicles and personal mobility vehicles
Compulsory motor insurance covers harm to third parties within the limits set by the rules, and voluntary cover extends those limits and adds further cover. In the case of personal mobility vehicles, the insurance requirement depends on the use and on the applicable rules: for commercial use and delivery fleets in Barcelona it is required, and for private use it is highly advisable even where it is not always compulsory, because knocking someone down without cover means answering with your own assets. The municipal obligations for personal mobility vehicles are set out in the guide to the Barcelona electric scooter by-law.
Home and residents' association
This covers everyday harm: a leak affecting the flat below, an object falling from a window or damage caused to a third party. Two positions that are often confused must be distinguished: the owner needs liability cover as owner of the property, and the tenant needs tenant's liability cover, which covers the harm they cause to the rented home. The residents' association, for its part, has its own policy for the common parts, and in many water-damage claims all three are involved.
Pets
Animal welfare rules and the rules on potentially dangerous animals have strengthened the requirement for public liability cover for dogs. It is worth checking whether the home insurance already includes it and, above all, whether the animal is expressly declared in the policy: generic cover may not respond if the animal is not listed.
Professional indemnity
Compulsory for solicitors, doctors, architects, quantity surveyors and other regulated professionals. It covers loss caused to clients by errors in the practice of the profession. The Il·lustre Col·legi de l'Advocacia de Barcelona, like other professional bodies, arranges group policies for its members. Where the harm is medical, the claim follows the route explained in the guide to medical negligence in Barcelona.
Operating and product liability
For businesses and the self-employed: harm caused to customers or visitors in the course of the business, and harm arising from the products manufactured or distributed. In businesses dealing with the public it is the most worthwhile cover there is.
Cyber risks
Traditional public liability cover does not usually extend to the consequences of a security breach or a ransomware attack, and liability towards those affected and towards the data protection authority is real. For law firms, clinics and shops that process personal data it is a specific cover worth considering separately.
What it covers and what it excludes
In general, a public liability policy covers:
- Damage to third parties' property.
- Bodily injury and its consequences.
- Financial loss arising from either of these.
- The costs of legal defence and of providing security for costs.
- Experts' fees needed to prove the loss.
And it usually excludes, with variations depending on the contract:
- Harm caused deliberately by the insured, which can never be insured.
- Harm to the insured themselves and to family members living with them.
- Administrative penalties and fines, which are personal and cannot be transferred.
- Harm arising from activities not declared in the policy.
- Purely financial loss with no prior damage to property or person, unless expressly covered.
- Contractual loss, that is, defective performance of the contract itself, which is claimed by the route explained in the guide to civil contracts and claims.
The small print worth reviewing
Sum insured and sub-limits
The sum taken out years ago may have fallen short of the current cost of compensation for serious injury. It is worth reviewing the limit per claim, the limit per victim and the annual aggregate, as well as the internal sub-limits that reduce cover for particular heads.
Excesses
How much the insured bears before the insurer pays, and whether it applies per claim or per year.
Temporal scope
This is the clause that causes the most trouble in professional indemnity. Some policies cover events occurring during the policy period and others cover claims received during the policy period, known as claim madeclauses, with retroactive and run-off periods. Changing insurer without checking this clause can leave a gap in cover in precisely the years that matter later.
Limiting clauses
The Insurance Contract Act requires clauses limiting the insured's rights to be specially highlighted and accepted specifically in writing. A limitation buried in the general wording and not signed separately is open to challenge, and this is one of the most effective ways of contesting a refused claim.
The duty to disclose the risk
The prior questionnaire matters: a material omission or inaccuracy can reduce the payment proportionately, or release the insurer altogether where there was fraud or gross negligence. Declaring the activity, the number of employees or the animal's breed correctly is what sustains the cover on the day of the incident.
How a claim is made
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Document the event straight away
Photographs and videos, the police report if there is one, the witnesses' details, invoices and repair estimates. The more time passes, the harder it is to prove the state things were left in.
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Medical attention if there are injuries
Go to A&E the same day and keep the report. That is what links the injury to the event, and its absence is the insurer's first argument for disputing causation.
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Identify the person responsible and their insurer
The company and the policy number. If the person responsible is a residents' association, a shop or a professional, it must be requested in writing: there is a duty to provide the insurance details.
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Notify the claim in time
The insured must notify their insurer within the period set by the policy, which is usually seven days. The injured party, for their part, sends the claim to the insurer of the person responsible by way of a conclusive written communication.
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Assess the loss before accepting anything
Damage to property is proved with estimates and invoices; bodily injury, with medical reports and, if significant, an expert assessment of the injury. Accepting the first offer before the final extent is known is the most frequent and the most expensive mistake.
If the insurer refuses or does not reply
- Customer service department and insurance ombudsman. Every insurer must have an internal customer service department, and many also have an insurance ombudsman. It is a preliminary step, with a set period for replying.
- Dirección General de Seguros y Fondos de Pensiones (the Spanish insurance regulator). It accepts complaints once the internal route has been exhausted. Its report is not binding, but it carries weight.
- Court proceedings. Where the offer is insufficient or the refusal has no basis. This is where the late-payment interest under article 20 of the Insurance Contract Act comes into play: if the insurer neither pays nor pays into court in time without justified cause, the interest increases significantly. It is the best negotiating tool the injured party has.
The time limit under an insurance contract is short
Claims arising from an insurance contract become time-barred after two years in property insurance and five years in personal insurance. The injured party's direct right of action against the insurer follows the time limit for the liability being claimed, which in tort is one year. It should always be interrupted by a conclusive written communication.
Other related guides
Civil liability and insurance
Claims for harm against the person responsible and against their insurer, out of court and in court.
Go to the practice areaRoad traffic accidents in Barcelona
The most common civil liability situation: what to do after the incident and how bodily injury is assessed.
Read the guideCivil contracts and claims
The other route for claiming: breach of contract, the compensation for it and its limitation periods.
Read the guideGuide written by the firm Ajuridic. Principal: Noemí Ampurdanés Parés, lawyer registered with the ICAB under no. 22359, with more than 30 years in practice.
It is general information only. It does not constitute legal advice and does not replace reading the particular wording of a policy or analysing a specific claim.
How long there is to claim for an incident
The time limit changes depending on whether the claim is contractual or non-contractual. Check it before writing to the insurer.
Time limit checker
Eleven time limits covering fines, employment, damage claims and inheritance. Enter the start date and it shows the deadline for acting and how many days are left.
Check a time limitDocument checklist
The list of papers for six of the firm's procedures, tickable and printable, so you arrive at the first consultation with the file already checked.
Open the checklistIf the insurer has already made an offer, better to review it
With the policy, the claim form and the insurer's offer, it is possible to assess whether the figure matches the loss and whether the refusal has any basis. The firm is at Carrer del Freser, 104, in El Clot.