In the course of its activity, a company is likely to cause damage to others and thus incur its professional civil liability. Repairing the damage is a legal obligation and can be expensive. To limit such a risk and not find yourself in a situation of insolvency, it is possible to take out professional liability insurance, known as RC Pro insurance. Depending on the guarantees chosen, this insurance, sometimes made compulsory, can cover damages and thus avoid placing this burden on the company.
What is professional civil liability?
A quick definition of professional civil liability
As defined in article 1420 (formerly 1382) of the Civil Code, civil liability obliges anyone who causes damage to others to repair it by paying damages.
Professional civil liability is incurred when a company causes harm to a third party in the course of its activity. The damage may have been caused by property or persons dependent on her. It can be a:
- Intangible damage: financial loss resulting from the loss of an expected benefit or the deprivation of enjoyment of a right.
- Material damage: alteration or destruction of the property of others.
- Physical damage: bodily harm affecting the physical integrity of a person (injury, etc.).
The damage may just as well result from imprudence, an omission, an involuntary fault, or negligence.
The victim can be a customer, a supplier, or a third party who is not bound by any contract.
Who is affected by professional civil liability?
In law, any natural or legal person who has acquired legal personality can see his civil liability engaged. In other words, anyone who causes damage to others must repair it.
In the case of professional civil liability, it is the company that engages its civil liability when damage is caused in the course of its activity. This can be caused by a manager, but also by an employee, a subcontractor, by the company’s equipment, or by what it produces. The company, responsible for the actions of these people, must bear any damages and interest to be paid to the victim up to the amount of the damage suffered.
If it is a sole proprietorship, the professional liability and the legal obligation to repair the damage weighs on the manager, because it is he who has a legal personality. It is therefore up to him to personally pay the damages if he is not insured.
In what cases is it involved?
There are many cases in which professional civil liability can be incurred. It can be invoked by the victim if he proves the existence of damage, caused by a legal fact. A causal link must necessarily exist between the two elements.
There are two types of civil liability:
- Contractual civil liability: this concerns damages caused within the framework of a contract and in particular in the poor execution of the latter.
- Extra-contractual or tort civil liability: this concerns damage caused that does not concern contractual obligations.
In the context of its activity, here is a non-exhaustive list of situations that may give rise to professional civil liability:
- When a customer is injured on your premises.
- If food poisoning has occurred in your restaurant.
- If a manager or employee breaks or damages equipment on a client’s premises while traveling during a mission.
- If there is a delay in the execution of a contract such as the delivery of a product or a service that is detrimental for the other party.
Professional liability insurance: what is it for?
The importance of professional indemnity insurance
Professional civil liability insurance, or RC Pro insurance, covers the company against the damage it may cause in the context of the performance of its services (delivery of goods or provision of a service). It is extremely important because it makes it possible to cover the damages paid to the victim, which sometimes represent a significant sum. Indeed, the role of damages is to repair the prejudice, moral or material. This compensation, unlike a fine, is not capped. Consequently, its amount risks putting the company in a delicate situation, even insolvency. In some cases, this can lead to a bankruptcy situation.
The situations that engage professional civil liability are numerous and are part of the life of a company. Every society risks being exposed to it during its lifetime.
Is RC Pro insurance compulsory?
RC Pro insurance is compulsory for regulated professions such as:
- Legal professionals such as notaries or lawyers
- Health professionals such as doctors or nurses
- Building professionals
- real estate agents
- travel agencies
Note: building craftsmen have the additional obligation to take out ten-year insurance, which is a specific guarantee of RC Pro insurance.
Otherwise, it is not mandatory but highly recommended. Indeed, the risk borne by the company is high. As seen above, there are many cases that involve professional civil liability and require the payment of damages. RC Pro insurance is rarely an unnecessary expense.
In addition, it is possible that some partners require an RC Pro insurance certificate before contracting.
The best advice is to take out RC Pro insurance regardless of the profession.
Which RC Pro insurance to choose?
To cover the company and its employees for all the damage they may cause, it is advisable to choose an appropriate RC Pro insurance.
RCP insurance makes it possible to cover the company for damage arising in the context of the performance of its services.
There are various additional guarantees, to be chosen according to the needs and risks related to the activity. Here is a non-exhaustive list :
- “Operating” guarantee or operating civil liability insurance (RCE): this covers the company for damage that could be caused in the context of its operation, its daily activity.
- “After delivery” warranty: this extends the warranty to damage that may be caused after delivery of the product or service. It also covers any return or replacement costs that may be incurred.
- “Ten-year” guarantee: this is compulsory for building craftsmen. It covers the company for events that may occur during the 10 years following the date of acceptance of the work. It is useful in case of poor workmanship or construction defect.
When should I take out RC Pro insurance?
In the event that RC Pro insurance is compulsory, you are asked to be covered from the start of the activity.
For building professionals, the ten-year guarantee must take effect before the start of work.
If it is not mandatory, it can be subscribed at any time during the life of the company. The effective coverage time is fast. If you are not currently protected, it is therefore not too late to take out insurance