raspundere contractuala civila - leaderteam.ro

Contractual liability

Insurance Broker Insurance Professional Liability Insurance Contractual Civil Liability

Contractual Civil Liability Insurance

Protection for companies, self-employed professionals and specialists who have contractual liability towards clients or business partners, including contracts signed with international clients. Leader Team Broker reviews the contractual clauses and recommends the appropriate liability limit and coverage for the actual risk.

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Contractual civil liability insurance - Leader Team Broker

What is contractual liability?

Contractual liability is the obligation of one party to a contract to compensate the other party for loss caused when it fails to perform, performs late or performs its contractual obligations improperly. It is governed by the Romanian Civil Code and arises only where a valid contract has been concluded between the parties, unlike tortious liability, which arises outside a contractual relationship as a result of an unlawful act.

In practice, it is particularly relevant to service providers working under a contract. Contractual civil liability insurance is therefore arranged within a clear legal framework and based on the documents relating to the relevant contract. Leader Team Broker arranges these policies for different fields of activity, whether you are a service provider, a self-employed professional or a legal entity.

What types of contractual liability are there?

Depending on the source of the unfulfilled obligation, contractual liability can take several forms:

01Liability for complete failure to perform a contractual obligation;

02Liability for delayed performance, including missed delivery or service deadlines;

03Liability for improper performance, including defective services or works;

04Employer liability towards clients or tenant-landlord liability attached to the underlying contract.

Contractual liability vs. tortious liability

The essential difference lies in the source of the obligation. Contractual liability requires a contract between the parties, while tortious liability does not require any prior contractual relationship and applies when an unlawful act causes loss or damage to a third party. In practice, this distinction also determines the type of liability insurance appropriate to each situation.

Who needs contractual civil liability insurance?

Engineer with an international contract, contractual liability insurance - Leader Team Broker

Engineers and professionals with international contracts

Clients within or outside the European Union often require contractual evidence of contractual and professional liability insurance, commonly referred to in international contracts as professional liability insurance or general liability insurance, before the engagement begins.

For engineers, technical consultants and other professionals providing services to overseas clients, such a policy covers the risk of compensation following an error, delay or non-compliance reported by the client, regardless of the jurisdiction in which that client is registered.

Company and self-employed professional with B2B contractual activity, contractual liability insurance - Leader Team Broker

Companies and self-employed professionals with B2B contracts

Service companies, self-employed professionals and freelancers working under contracts with penalty clauses, strict delivery deadlines or responsibility for the quality of their work may need contractual liability insurance covering failure to perform or improper performance of obligations towards partners or clients.

What does contractual civil liability insurance cover?

Within the limits and terms of the policy, contractual civil liability insurance covers loss caused to a contractual partner where a causal link is established between the insured’s conduct, such as non-performance, delay or defective performance, and the resulting loss:

Damages for failure to perform or delayed performance of the contract;

Property damage caused through the insured’s own fault while performing the contract;

Bodily injury or property damage caused to third parties in connection with performance of the contract;

Legal expenses where the dispute reaches court.

In addition, other types of coverage may be added to a contractual civil liability policy, including:

Product liability for certain bodily injury or compensation claims,

Employer’s liability in relation to employees,

Tenant-to-landlord or landlord-to-tenant liability coverage.

Contractual liability: conditions and exemptions

For compensation to be awarded, four elements must be established cumulatively: the act or omission, including non-performance or defective performance, the loss suffered by the contractual partner, the causal link between the act and the loss, and the insured’s fault. The absence of any one of these elements may lead to exemption from contractual liability.

Pure financial losses that do not arise from a distinct service contract are generally addressed separately through general liability insurance, which complements contractual liability insurance.

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Contractual civil liability

Contractual liability insurance: protection in the event of a breach of contract

Contractual liability insurance is arranged to protect one party against losses that may arise because the other party fails to comply with its contractual obligations. This policy is widely used in business and may cover a broad range of situations, including missed contractual deadlines, losses caused by delays, defective work or services, and legal expenses in cases that reach court.

Where required, additional coverage may be added, such as product liability for bodily injury, employer liability towards clients, and tenant-to-landlord or landlord-to-tenant liability.

Useful insurance policies

Leaderteam.ro meets a wide range of needs with different types of useful insurance policies: professional liability insurance, general liability insurance, cyber risk insurance etc.

Service provided under a contract

Contractual civil liability insurance: coverage for a service provided under a contract

Contractual liability insurance can be arranged through our company for various fields of activity. Legal entities, self-employed professionals and service providers are among those for whom this type of policy may be relevant. If a signed contract is not respected, for example through defective delivery of products, misuse of information or an incorrectly manufactured product, a dispute may arise and may or may not be settled amicably. Contractual civil liability insurance can provide the appropriate protection.

If such a situation arises, the insured should notify us so that our consultants can assess the circumstances and identify the most suitable solutions for covering the loss.

Third-party protection

Third-party liability: what it covers

Third-party liability refers to situations in which a person or company causes loss or damage to another person or entity and may be required to bear the cost of making good that loss. Internationally, this coverage is commonly known as public liability or general liability, terms increasingly used in requests from B2B clients in Romania.

Depending on the type of policy and its contractual terms, coverage may include property damage, bodily injury, certain financial losses and defence or legal costs.

Examples include accidentally damaging a client’s property, damaging equipment held in custody, causing a leak that affects a neighbouring property, or bodily injury suffered by a person who has an accident on premises for which the insured is responsible.

For professional activities, errors, omissions or incorrect advice may require a separate professional liability policy, while pure financial losses are covered only when expressly provided for in the insurance contract.

Types of damage

Property damage, bodily injury, certain financial losses, defence costs and other eligible expenses, depending on the wording of the policy.

Examples of liability limits

In practice, the limit may be set per occurrence and/or as an annual aggregate. As indicative examples, limits of EUR 100,000, EUR 500,000 or EUR 1,000,000 may be available depending on the activity, contracts and exposure. The actual limit is the one stated in the policy.

It is also important to review sub-limits, deductibles, exclusions, the territory of coverage and the insured period. For example, a policy may have an overall limit of EUR 500,000 but a lower sub-limit for certain types of loss. For this reason, an offer should be compared not only by price, but also by the actual structure of the coverage.

Contractual liability for international contracts

When a contract is signed with an overseas client, contractual civil liability insurance is usually assessed together with professional liability insurance. The first risk concerns failure to comply with commercial clauses, such as deadlines, specifications and penalties, while the second concerns errors or omissions in the service provided. Many European clients make the signing of the contract conditional on both covers being in place, with a liability limit expressed in EUR and valid in the territory where the service is provided.

In English-language contracts, these covers are often referred to as public liability cover, general liability insurance or, more generally, liability insurance.

Leader Team Broker reviews the liability clause in the international contract and recommends the appropriate limit, territory of coverage and any required extensions, so that the policy meets the requirements imposed by the overseas partner.

Request a quote for your international contract

Complementary solutions

Contractual civil liability insurance: related services for professionals exposed to contractual risk

IT professional liability insurance

Amazon seller liability insurance

Product recall insurance

Cyber risk insurance

For an overview of the available liability policies, see the professional liability insurance.

Leader Team Broker advantages

Why choose a liability insurance policy from Leader Team Broker?

We are prompt and quickly assess situations that require insurance.

We are up to date with compensation requirements and strive to provide the most appropriate coverage.

We carefully assess the need for additional coverage and provide suitable solutions where required.

We are transparent and provide the information you need to obtain suitable coverage for your circumstances.

Frequently asked questions about contractual civil liability insurance

What conditions must be met for contractual liability to arise?

Contractual liability arises when four cumulative conditions are met: failure to perform, delayed performance or improper performance of the contractual obligation; loss suffered by the other party; a causal link between the breach and the loss; and fault on the part of the party owing the obligation. The court or insurer assesses these elements before compensation is awarded.

What is the limitation period for a contractual liability claim?

The general limitation period for a contractual liability claim is three years from the date on which the injured party knew or should have known of both the loss and the party responsible for it, subject to the specific exceptions provided by the Romanian Civil Code for certain types of contract.

What is contractual civil liability insurance?

Contractual civil liability insurance is a policy under which the insurer covers, within the limits of the insurance contract, compensation owed by the insured to a contractual partner for non-performance, delayed performance or defective performance of a contract, including eligible legal expenses relating to a dispute.

How much does contractual civil liability insurance cost?

The cost depends on the field of activity, the value and duration of the contracts, the territory of performance, whether Romania or abroad, the required liability limit and the claims history. There is no standard price; the quotation is calculated after the relevant contractual clauses have been reviewed.

Who needs contractual civil liability insurance?

Companies, self-employed professionals and specialists providing services under contract, including engineers, consultants and professionals with international clients, may need this coverage when they are liable for failure to perform or improper performance of their contractual obligations.

How do you obtain contractual civil liability insurance online?

Complete the form on this page or call +40 726 715 491 with information about your activity, the types of contract and the territory of performance. Based on this information, the risk is assessed and a personalised quotation can be requested from insurers.

What risks are covered by contractual civil liability insurance?

Contractual civil liability insurance may cover risks such as failure to fulfil or improper fulfilment of contractual obligations, delivery delays and breaches of contractual terms. Depending on the wording, the policy may also include certain consequential losses and contractual penalties.

How is the contractual liability insurance premium determined?

The premium is determined by factors such as the value of the contract, the type of activity and the insured’s risk and claims history. Insurers assess the specific exposure to calculate the cost of the policy.

Is contractual civil liability insurance compulsory?

Contractual civil liability insurance is not generally compulsory by law, but it is often required under commercial contracts to protect the parties involved. It can help manage the financial consequences of a breach and reduce the impact of costly disputes.

What are the benefits of contractual liability insurance?

Contractual liability insurance protects against financial losses resulting from failure to fulfil contractual obligations. It can help cover eligible damages and compensation claimed by business partners, subject to the terms, limits and exclusions of the policy.

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Speak directly with a specialist and quickly find out which type of insurance suits your activity, which risks can be covered and what options are available for the right protection.

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Alexandra Elena Durbaca

International Insurance Specialist

Leader Team Broker

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