Indemnity Insurance
What is third-party liability insurance and what does it protect you from? ➢ Third-party liability insurance
What is the difference between private and professional third-party liability insurance? ➢ Professional third-party liability insurance
When does third-party liability insurance make sense for an association? ➢ Third-party liability of associations
When does public liability insurance make sense? ➢ Public third-party liability insurance
Who is an organiser, what is an organiser liable for, and how can he protect himself? ➢ Organiser‘s liability
Third-party liability insurance
What is third-party liability insurance and what does it you from?
In Austria, liability is governed by law and defined in the General Civil Code (Allgemeines Bürgerliches Gesetzbuch, ABGB). Liability means that a person who causes loss or damage (personal injury, property damage or financial loss) to another person by his or her own action or omission must compensate the other person by paying damages. The person is under an obligation to provide compensation for loss or damage. The third-party liability insurer will check the legal situation, fend off unjustified claims and settle justified claims.
There is private, professional (professional third-party liability) and business (public/organiser’s) third-party liability insurance.
Please note
There is no third-party liability insurance that covers all conceivable forms of loss or damage arising out of third-party liability. Each risk must be insured individually.
Please note
The system of third-party liability is not uniform in Europe. The respective law of the member states of the European Union applies. In the German-speaking countries, the systems are similar. For useful information, see the European Job Mobility Portal:
Artists who spend lengthy spells abroad, either privately or as part of their professional activity, should consult with their insurer as to what extent the coverage of their existing third-party liability insurance(s) which was concluded in Austria would also include the EU or third countries and increase coverage as appropriate.
Professional third-party liability
What is the difference between private and professional third-party liability insurance?
Most household insurances include also private third-party liability insurance.
Please note
Private third-party liability insurance does not cover loss or damage caused in the exercise of a self-employed or business activity.
Under the law, self-employed artists are considered business undertakings and should have professional third-party liability insurance. Unlike employed persons, self-employed persons are personally liable for any loss or damage they cause.
Third-party liability insurance generally covers personal injury, property damage and financial loss. Special risks such active contributory loss or damage, loading and unloading damage, damage caused to rented property , loss of keys, etc. may be insured specifically.
Example
On a visit to his agent, an artist falls and knocks over the monitor of the PC which crushes on impact.
This is a property damage. Third-party liability claims arise on account of damage being caused to third-party objects in the course of a professional activity of the insured person. Professional third-party liability insurance would be liable for compensation.
Hint
With co-productions, guest performances of ensembles, performances of a band or participation in exhibitions (and similar), it is sometimes unclear who is liable in the event of loss or damage. It is therefore advisable for every individual artist to have his or her own professional third-party liability insurance.
Ensembles/bands who act as organisers of short-term projects often have a clause included in the contracts with the artists stating that insurance must be taken out by the artists themselves. Also, you will find a clear reference to the organiser’s liability being excluded. In case of loss or damage, liability then lies with the artist himself or herself. Some companies require artists to submit evidence of professional third-party liability insurance in the first place.
You should at any rate clearly agree on liability with the organiser, the inviting organiser of an exhibition or the company beforehand. In this way, costs for additional insurance may be factored into your fee.
Please note
It is important to explicitly specify any relevant risks in the insurance contract to avoid difficulties in claims settlement.
Equally, coverage for loss or damage occurring abroad must be agreed upon on conclusion of the insurance contract.
Specific professional groups such as pyrotechnicians need special contracts.
Example
When setting up an exhibition in Indonesia, an Austrian artist damages the work of another artist.
Ideally, the artist has pointed out herself when taking out insurance that she (and not a professional contractor) will be involved in the set-up so that this risk can be covered.
If so agreed upon conclusion of the contract, damage caused abroad is equally covered.
Example
An artist from Israel works for several months in Austria. Is there a way to obtain short-term third-party liability insurance in Austria?
She should consider taking out third-party liability insurance with an insurer in her home country. In the event of loss or damage, handling is less complicated, in particular if she is no longer in Austria. Language barriers may also be a reason for taking out insurance at home.
Alternatively, foreign artists may take out insurance for short-term stays in Austria with an Austrian insurer. The premiums for short-term insurance are roughly the same as those for an entire year.
If the Israeli artist can foresee that she will be come to stay several times in Austria within a period of twelve months, it might make sense to compare short-term insurance with an annual insurance and weigh the two variants as to their benefits and costs.
Hint
If you already have private third-party liability insurance, you might be able to take out professional third-party liability insurance as an add-on.
Third-party liability of associations
When does third-party liability insurance make sense for an association?
Many cultural institutions in Austria are set up as an association. Third-party liability insurance for associations makes sense to a limited extent only.
Before taking out any such insurance make sure to verify whether third-party liability insurance for associations will actually be liable in the event of loss/damage or whether any other insurance (e.g. organiser’s third-party liability insurance) would cover the risks better.
Third-party liability insurance for associations covers damage/loss (personal injury, property damage, not financial losses) caused by an association in the course of its usual activities through its members (or those acting on behalf of the association) externally vis-à-vis persons who are not members of the association.
It does not however insure the members of the association vis-à-vis the association!
Example
During the rehearsals for a concert, an association member damages the association’s mixing console.
The association’s third-party liability insurance is not liable in this case. The damage would only be covered by a professional third-party liability insurance of the member. Private third-party liability insurance would be liable only if the damage is caused during free time.
Example
In the course of a business meeting with another association, the chairwoman of one association (a member of the association) damages the beamer of another association (a legal entity that is not a member of the first association).
Since the damage is caused in the course of her activities as member of an association to a person who is not member of that association, the damage is covered by the association’s third-party liability insurance.
Please note
Whatever exceeds the scope of standard events of an association is not insured, as well as all events of an association where guests, an audience etc. are present. Such events can be insured by an organiser’s third-party liability insurance.
Example
During a theatre performance at the association’s clubhouse, a spotlight drops to the ground and injures a visitor.
As this is a public event with an audience, the association’s third-party liability insurance is not liable. You would need an organiser’s or public third-party liability insurance in this case.
Public third-party liability insurance
When does public liability insurance make sense?
Taking out public third-party liability insurance may be important for self-employed artists who run their own business, such as a cabaret theatre or gallery.
Public third-party liability insurance is liable for loss/damage resulting from personal injury, property damage and resultant financial losses which are caused to a third party by the business activity. Not only the owner of a business is insured, but also all staff members.
Please note
When concluding the contract, business owners should specify the precise nature and extent of their business activity in as much detail as possible, since only what is set out in the insurance policy will be actually covered.
Example
At an exhibition in a gallery, a visitor trips over a loose, insufficiently secured cable and hurts herself.
This is a case of personal injury for which the owner of the gallery and/or the staff member who laid out the cable can be held liable. If the gallery owner has public third-party liability insurance, the latter will compensate the damage.
Example
A theatre leases the buffet out to a caterer. The salmon sandwiches on offer were spoiled, three visitors are hospitalised with food poisoning as a consequence.
Since the caterer acts within his own sphere as a self-employed entrepreneur who is not affiliated to the theatre (i.e. a staff member), the public third-party liability insurance of the theatre is not liable. The caterer himself is liable for the damage caused; his own public third-party liability insurance will generally be liable in this case.
Please note
If activities are conducted abroad, e.g. if a theatre goes on tour, insurance coverage must be increased accordingly.
Organiser‘s liability
Who is an organiser, what an organiser liable for, and how can he protect himself?
Organisers are liable without limitation and with all of their assets for all loss/damage caused by their own fault, and by the fault of employees, participants and guests. As a general rule, an organiser’s third-party liability insurance covers all personal injuries and property damage for which an organiser is liable, including such caused by guests and unknown persons. Additional coverage taken out later on may protect against damage that becomes apparent only after an event.
Please note
Third-party liability normally lies with the organiser. If several persons are involved in the organisation of events, you should clarify on concluding the contract who is acting as organiser.
Anyone who rents a venue for an event will usually be obliged by contract to take out insurance for the event. The required insurance should be listed in the general terms and conditions and/or in the contract. Only damage that is caused be defective equipment (if e.g. a lamp comes loose and causes bodily injury to a person) will be covered by the third-party liability insurance of the lessor.
Example
A fire at the venue of an event is caused by defective cabling. Some visitors are hurt and some of the equipment is damaged.
The lessor is liable for the damage caused, since it is attributable to defects at the venue of the event. If, however, the damage was caused by negligent overloading of the electric circuit by the lessee, the third-party liability of the lessee (professional third-party liability if the damage was caused as part of his business activities) will be liable.
Hint
Make sure to verify at any rate before signing a contract who is contractually responsible for taking out insurance for the event. This applies to events in Austria as well as to events abroad.
If stages or venues are rented only sporadically, it is advisable to take out short-term, event-related insurance. This can also be done for events abroad. For recurring events, it is usually less costly to take out annual insurance and not to insure each event separately.
In general, the insurance premium depends on the type of event, the number of visitors, the number of days etc.
For a premium calculator, see http://www.sicher-veranstalten.at/kalkulator/
Please note
If an organiser has not taken out an organiser’s third-party liability insurance, artists, ensembles and bands should urgently point out the risks, and, as the case may be, take out appropriate insurance themselves.
Example
An Austrian dance company is invited to France for a guest performance on four nights. The French organiser requires the ensemble to submit evidence of third-party liability insurance with a liability limit of EUR 300,000.
It is most advisable for the ensemble to take out insurance themselves. There is short-term third-party liability insurance for events, and annual insurance. In this case, insurance coverage for a distinct number of days would certainly make more sense.
Insurance should preferably be taken out in Austria, as it is easier to handle for the Austrian ensemble (language, accessibility, …..).
Hint
Before negotiating their fees, artists, ensembles and bands should consider which insurance is required and factor the insurance premiums into their fees.