French Insurance Code
In forceInformation sheet on the operation of "civil liability" cover over time Warning
This information sheet is issued pursuant toarticle L. 112-2 of the French Insurance Code.
Its purpose is to provide you with the information you need to understand how third-party liability cover operates over time.
It concerns policies taken out or renewed afterarticle 80 of law no. 2003-706 came into force on 3 November 2003. Contracts taken out prior to this date are subject to special provisions set out in the same law.
Understanding the terms
Fait dommageable :
The fact, act or event causing the damage suffered by the victim and which is the subject of a claim.
Claim :
An accusation that you are liable, either by letter or any other durable medium sent to the insured or the insurer, or by summons before a civil or administrative court. The same loss may be the subject of several claims, either from the same victim or from several victims.
Period of validity of cover :
Period between the date on which the cover takes effect and, after any renewals, its date of cancellation or expiry.
Subsequent period :
Period after the date of cancellation or expiry of the cover. Its duration is specified in the contract. It cannot be less than five years.
If your policy covers only personal liability, see I.
Otherwise, refer to I and II.
I.-The contract covers your private liability
In the absence of any professional activity, cover is triggered by the harmful event.
The insurer provides cover when a claim is made following damage caused to others and you or other persons covered by the policy are held liable, provided that the event causing the damage occurred between the effective date and the date of cancellation or expiry of cover.
The claim must be made to the insurer whose cover is or was in force at the time the harmful event occurred.
II - The contract covers civil liability
incurred as a result of a professional activity
The insurance contract must specify whether cover is triggered by the "harmful event" or by the "claim".
Where the policy contains both cover for your civil liability arising out of your professional activity and cover for your civil liability in your private life, the latter is triggered by the harmful event (see I).
However, certain contracts, for which the law lays down special provisions, depart from this rule; this is the case, for example, with compulsory ten-year construction insurance.
1. How does "triggered by the harmful event" work?
The insurer provides cover when a claim is made following damage caused to a third party and you or other persons covered by the policy are held liable, provided that the event causing the damage occurred between the effective date and the date of cancellation or expiry of cover.
The claim must be made to the insurer whose cover is or was in force at the time when the harmful event occurred.
2. How does the "claim triggered" method work?
Whatever the case, the insurer's cover is not payable if the insured was aware of the harmful event on the day the cover was taken out.
2.1. First case: the third party's claim is made to the insured or to the insurer during the period of validity of the cover taken out.
The insurer will provide cover even if the event giving rise to the claim occurred before the cover was taken out.
2.2. Second case: the claim is made to the insured or the insurer during the subsequent period.
Case 2.2.1: the insured has not taken out any new liability cover triggered by the claim covering the same risk.
The insurer provides cover.
Case 2.2.2: the insured has taken out new liability cover triggered by the claim with a new insurer covering the same risk.
It is the new cover that comes into play, unless the insured was aware of the harmful event on the day it was taken out, in which case it is the previous cover that comes into play.
Therefore, as long as there is no interruption between two successive guarantees and the claim is sent to the insured or his insurer before the expiry of the subsequent period of the initial guarantee, one of the two insurers is necessarily competent and will deal with the claim.
When the initial cover is triggered during the subsequent period, the limit of compensation may not be less than that of the cover triggered during the year preceding the date of its cancellation or expiry.
3. In the event of a change of insurer.
If you have changed insurers and a claim is only made during the term of your new policy for an event that occurred before you took out your new policy, you must decide which insurer will pay you. Depending on the type of contract, either the old or the new insurer may be entitled to claim. See the typical cases below:
3.1. The old and new cover are triggered by the harmful event.
The cover activated by the claim is that which is or was valid on the date of the harmful event.
3.2. Both the old and the new cover are triggered by the claim.
Your previous insurer must deal with the claim if you were aware of the harmful event before taking out your new cover. No cover is payable by your former insurer if the claim is addressed to you or to your former insurer after the expiry of the subsequent period.
If you were not aware of the harmful event before taking out your new cover, your new insurer will accept your claim.
3.3. The old cover is triggered by the harmful event and the new cover is triggered by the claim.
If the harmful event occurred during the period of validity of the old cover, the old insurer must deal with claims relating to damage resulting from this harmful event.
In the event that the amount of this cover is insufficient, the new cover triggered by the claim will then be used to make up the shortfall, provided that you were not aware of the harmful event before the date on which you took out your new cover.
If the harmful event occurred before the old cover took effect and remained unknown to the insured on the date the new cover was taken out, the new insurer must deal with claims relating to damage resulting from this harmful event.
3.4. The old cover is triggered by the claim and the new cover is triggered by the harmful event.
If the harmful event occurred before the date on which the new cover was taken out, the old insurer must handle the claims. No cover is payable by your former insurer if the claim is made to the insured or to your former insurer after the expiry of the subsequent period.
If the harmful event occurred during the period of validity of the new cover, it is of course the insurer of the new cover who must handle the claim.
4. In the event of multiple claims relating to the same harmful event.
The same harmful event may be the cause of multiple losses which occur or become apparent at different times. In this case, several claims may be submitted successively by the various third parties concerned. In this case, the loss is considered to be a single event. As a result, the same insurer takes responsibility for all the claims.
If the harmful event occurred while your policy was triggered on the basis of the harmful event, it is therefore your insurer on the date when the harmful event occurred who must handle the claims.
If you were not covered on the basis of the harmful event at the date of the harmful event, the insurer who must be designated is the one who is competent, under the conditions specified in paragraphs II-1, II-2 and II-3 above, at the time the first claim is made.
Once this insurer is competent for the first claim, subsequent claims will then be handled by this same insurer regardless of the date on which these claims are made, even if the subsequent period has passed.
