Liability insurance in Switzerland protects yourself and your family from the financial consequences of injury caused to a third party and to damage caused to someone else’s property or belongings. Swiss personal liability insurance is valid worldwide.
Whether you accidentally hurt someone, set their property or your rental on fire or damage someone’s favorite gadget, your personal liability insurance will compensate the third party for their loss. Compensation includes medical expenses, re-construction costs and potential loss of income benefits.Thanks to personal liability insurance your financial security will never be compromised in the event of a third party claim against you or your family.
Some concrete examples illustrate why it is important to subscribe to Personal Liability Insurance in Switzerland:
- If you cause an injury by accidentally pushing a person your personal liability insurance will compensate the person by paying for their medical bills and potential loss of income.
- If you or a member of your family accidentally damages your hotel room or breaks an expensive item while on holiday your liability insurance will compensate the damage done worldwide.
- Your personal liability insurance will also compensate a third party if you accidentally break anything that belongs to them, such as their cell phone, musical instrument or eye glasses.
- If you get wrongly accused by a third party for damage you or a member of your family inflicted, your liability insurance will cover the legal costs required to defend your rights.
It is obligatory for all Swiss tenants to subscribe to personal liability insurance when they rent a property in Switzerland. The landlord requires this insurance coverage in case the tenant causes a fire which destroys part of his or her building or causes any other damage that requires repair.
Imagine the financial consequences you must face if you accidentally set fire to the apartment you are renting or injure someone who requires hospitalization and loss of income benefits.Without liability insurance you could find yourself personally compensating the damage or injury for the rest of your life. Liability claims can be counted in millions.
Most providers only offer CHF 5 or 10 million coverage today; less and less offer 3 million, so do not hesitate to ask for the higher amount, the additional millions add very little to the yearly premium and could be a life saver in the event of a major claim.
What amount is compensated in the event of a claim?
It is important to note that Swiss liability insurance compensates actual value and not replacement value. The replacement value is the amount it costs to buy the same item again at its current market value, even if your item is five years old. Actual value takes depreciation into consideration, this can considerably lessen the amount you receive in compensation if the object you break is 3 or more years old. Generally speaking insurance companies depreciate an item by 10% per year.
This is why it is important to add coverage for fragile surfaces and windows to your contents insurance when you are a tenant. Why? Because if you break a window or stove top that is 6 years old the liability insurance will only compensate actual value, which means 40% of the value of the item that needs replacing, leaving you with 60% of the invoice to pay out of pocket.
To compensate for the actual value policy of Swiss insurance providers advisers recommend opting for a 0.- deductible. This will increase the amount you will be refunded in the event of a claim. Imagine that you break a 6-year-old triple glazed French window:
- Replacement value CHF 1’000.-
- Actual value CHF 400.- (6 years of depreciation at 10% per year)
- Deductible 500.-
- Liability insurance compensation CHF 0.-
If you do the same calculation with a 0.- deductible, you will receive CHF 400.-
If you subscribed to fragile surfaces and windows in your contents insurance, you will receive the full replacement value of CHF 1000.-
Extended liability insurance coverage
Certain activities are considered to put the belongings and health of other people at more risk than others. To be covered specific modules must be added to the personal liability insurance policy. Activities include:
- Frequently driving a third party’s car or other motor vehicle
- Regularly using rental cars
- Riding a horse that belongs to a third party
- Using boats that belong to a third party
- Flying drones or model air crafts that weigh over 500 g
Teachers should also consult an insurance expert to protect themselves if the children under their responsibility get injured in class or on an outing. The liability insurance of the school will cover the initial claim, but the insurance provider or the school could then press charges against the teacher for the damage caused. A specific teachers liability module is required to defend the teacher if this happens.
In all of the above cases an extended module must be added to your Swiss personal liability insurance policy to guarantee compensation in all circumstances.
For more information and assistance contact Charles McHugo, the certified Expat-Experts insurance specialist on +41 78 601 40 90. He will assess your needs and help you to optimize the financial security of your family. For a written guide to Personal Liability Insurance in Switzerland.