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11/18 M97/February 2018 Reinsurance

F1 Extent of cover and exclusions
Liability insurance is intended to protect the policyholder from the financial consequences of claims for
Protects from
financial compensation filed under civil law by third parties that have suffered loss or damage.
consequences of
claims for The insurer’s function is both to protect the interests of the policyholder when a claim is intimated by a
compensation
third party and to compensate the policyholder when it is proven that a legal duty exists and that duty
has been breached.
A public liability account can consist of the following subtypes:

Personal liability The liability insurance of a person in their capacity as a private individual, such as a
pedestrian or a cyclist.
Public liability This insurance is concerned with the liability risk resulting from the operations of a
business, including environmental risks. It covers material damage and bodily injury, as
well as consequential financial losses.

Be aware
Insurers seek to control their exposure by placing restrictions on cover provided involving very large values, such as
aircraft, and property which is, or should be, the subject of more specific forms of insurance, such as motor
vehicles.

Common public liability exclusions under treaty reinsurance deal with a number of risk areas, including:

aircraft
pollution, other vessels and
than that which anything to do
is sudden and with shipbuilding,
accidental docks etc. Reference copy for CII Face to Face Training

motor
asbestos
vehicles

contractors
Common public engaged in building,
tobacco
liability exclusions wrecking, demolition,
toxic waste

dams and
oil companies
subaqueous work

gases and mining, quarrying
explosives and excavating
erection and work
on towers and other
lofty buildings

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Chapter