Insurance terminology explained in simple terms
Statutory liability or liability refers to the obligation arising from legal provisions (in particular the law of obligations) to compensate for damage (personal injury, property damage or financial loss) caused to a third party.
In such a case, the party causing the injury may be liable to pay damages to the injured party under the respective conditions. If there is no legal basis for liability or other contractual obligations for a claim, no compensation will be given.
Principle: No liability without the law.
Statutory liability is distinguished from contractual liability. With contractual liability, the basis for claims does not result from statutory provisions, but from contractual agreements and obligations between the contracting parties, e.g. the principal and agent.
Most liability insurers accept claims based on statutory liability. Contractual liability is usually not covered by insurance.
(related terms: contractual liability )
Term: Statutory Liability
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