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researchers and the integrity of patenting and licensing compared to property insurance underwriting keeping in
discoveries have prevailed," said Carl Gulbrandsen, view certain special factors such as intangibility, liability
managing director of Warf." depending upon legal decision and legal jurisdiction,
inadequacy of statistical data, nature and gravity of legal
Times Global, Dt.18.10.2015 action from third party for damages caused by the insured.
All these factors create lot many underwriting difficulties
The news bulletin has been quoted to highlight the trend especially in respect of determining the sum-insured or
and nature of legal liability risks that enterprises or indemnity limit, rating the risks, deciding the, coverage,
professional face today for their wrongful acts. Another exclusions, terms and conditions of the cover.
purpose for this quotation is to examine whether such risks
are insurable. If insurable, it is to be examined which liability The nature and amount of third party liability depend on
policy may cover such legal risks. Please note that examing the judgment of court, which cannot be predicted or
insurability of risk is the first consideration of insurance forecasted for assessing the loss forecasting. The increasing
underwriting. To examine insurability of the aforesaid risks, public awareness about their legal rights against the act of
the following questions may come to our minds; negligence or nuisance of others is giving rise to the larger
1. Whether this sort of liability risk on Infringement of amount of court awards unlike before.
Copyright, Patent can be covered by any Liability The product liability and, D&O liability and professional
Insurance Policy? liability are some of the major areas that individuals and
enterprises are encountering with larger amount of court
2. If yes; which liability policy can protect the Apple Inc. awards for their act of negligence or nuisance.
from the above legal liability?
The courts in various parts of countries are pronouncing
3. If not; why not? verdicts for different amounts of awards against the same
or similar nature of negligence or breach of duty. Neither
4. If Apple Inc. takes a CGL Policy, whether it can cover the insured nor the insurer can predetermine the frequency
the legal liability on infringement of copyright? or severity of loss like the property insurance in view of the
past losses data.
5. If yes; under which section of the CGL policy? If not;
why not? The evolving civilization and the modernization of life have
been increasing the tendency for higher frequency and
6. What is CGL Insurance? How does it differ from Public severity of liability losses or award as it appears from recent
Liability or Product Liability Insurance? court judgments. Accordingly,liability underwriting is
getting more and more critical both nationally and
7. If the co's directors are held responsible for this internationally. Liability risk is one of the emerging risks
infringement, whether its D & O Liability policy, can today over the world due to the following factors:
respond to the legal liability? v Growing Legal awareness of people
8. How does a D&O Liability policy differ from other v Growing Industrialization, urbanization & IT Sector
Professional Liability Insurance?
v Growing complexities of life
Try to find yourself correct answers to the above questions
to test your knowledge on liability insurance. If you cannot
find, read this article . This article aims at highlighting only
basic concepts and common considerations of liability
insurance underwriting.
What is Liability Insurance and why? v Availability of tailor-made new products/ policies
Liability insurance covers the legal liability of the insured v Increasing number of statutes to ensure public
for their act of negligence or breach of duty either under protection
common law or under specific enactment. Liability v Increasing number of legal liability actions all over the
world
insurance covers only civil liability, and not criminal liability.
v High and increasing Court awards on liability on breach
Liability insurance underwriting is much more critical of duty and lack of professional skill
34 The Insurance Times, December 2015
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