In the field of professional civil liability, errors or omissions in the exercise of a profession can generate different types of damages to third parties. One of the key concepts in this type of insurance is that of primary property damage, which refer to economic losses suffered by clients or other third parties without prior material or personal damage.

Unlike the economic damages arising, which arise as a result of physical or material damage, the primary property damage directly affect the assets of the affected person due to incorrect professional performance.

In this article, we will explain in detail what primary property damage is, how it differs from other types of damage, and in which cases it can be covered by a property insurance policy. professional civil liability.

What is meant by primary property damage?

Primary property damages are: direct economic damages suffered by a third party due to a professional error, fault or negligence, without any prior material or personal damage.

These are losses to the affected party's assets as a result of non-compliance or poor performance of the contracted professional services.

Example: A financial advisor recommends an erroneous investment that causes financial losses to his client. Although there is no physical or material damage, there is direct financial loss, which constitutes primary financial damage.

Differences between primary property damage and derived economic damage

To better understand primary property damages, it is important to differentiate them from economic damages arising.

Both can be covered by a professional liability insurance policy, but it is essential to know the specific conditions of the contract.

Examples of primary property damage in different professions

1. Lawyers and legal advisors

If a lawyer makes a mistake in handling a case and this causes his client to lose a trial, the consequence is direct financial damage. Example: A lawyer does not file an appeal within the legal deadline, which prevents his client from appealing a financial penalty.

2. Consultants and auditors

Errors in financial reporting can result in significant losses for businesses and individuals. Example: An auditor fails to detect errors in a company's accounting and the company files incorrect tax returns, resulting in a fine.

3. Tax and accounting advisors

An error in tax management can lead to penalties and financial losses for clients. Example: A tax advisor files a tax return late, which generates interest and penalties for his client.

4. Insurance mediators

A failure to manage an insurance policy can leave a client without coverage in the event of a claim. Example: An insurance broker fails to renew a liability policy on time and his client receives a claim when he is no longer insured.

5. Engineers and architects

An error in the design of a project can cause delays and additional costs on a project. Example: An architect designs a structure with incorrect calculations and the work must be stopped to make modifications.

6. Technology sector professionals

Software development or system implementation can lead to financial losses if not done correctly. Example: A software development company delivers a platform with errors that prevent an e-commerce business from working properly, leading to sales losses.

How are primary property damages covered by professional liability insurance?

the policies of professional civil liability They usually include coverage for primary property damage, but it is essential to review the conditions of the contract.

For insurance to cover this type of damage, the following requirements must generally be met:

1. That the primary property damage is a consequence of a professional error.
2. That the injured party is a third party, such as a client or supplier.
3. That the claim is made within the policy coverage period.

In some cases, insurers may include franchises or limitations in the coverage of these damages, so it is advisable to seek advice before taking out the policy.

Why take out professional liability insurance with primary property damage coverage?

A professional error can generate high financial claims, putting the insured's assets at risk. Some reasons for having this coverage are:

1. Financial protection: It covers compensations that can be significant.
2. Legal security: Includes legal defense against claims.
3. Normative compliance: In some professions, it is mandatory to have liability insurance.
4. Confidence for customers: Adequate insurance provides greater security and professionalism.

Take out insurance with coverage of primary property damage It allows you to carry out your professional activity with peace of mind, minimising financial risks in the event of possible claims.

Tips for choosing the best professional liability policy

If you are looking to take out insurance that covers primary property damage, keep the following aspects in mind:

1. Verify that the policy expressly includes coverage for primary property damage.
2. Check the compensation limits and make sure they are appropriate to your professional activity.
3. Check if there are any deductibles or exclusions that may affect coverage.
4. Make sure the policy includes legal defense in case of claims.
5. Consult with insurance experts to get the best option according to your profession.

En canariskWe help you find the most suitable professional liability insurance for your activity, ensuring that you are protected against claims for primary property damage.

The primary property damage They represent a significant risk for many professionals, as they can generate financial claims without causing physical or material damage.

Have insurance professional civil liability Covering this type of damage is essential to protect the insured's assets and reputation.

En canariskWe are specialists in insurance for professionals. If you need advice on how to get the best policy, Contact us and request a personalized study without obligation.