Neighbors' and third parties' recourse (French property liability)
A liability cover attached to French property policies, covering the damage that a fire, explosion or water leak starting in the insured's premises causes to the property of neighbors and third parties.
A fire that starts in the premises of a business or individual does not always stop at its walls: it can spread to the neighboring building, damage a third party's goods stored nearby, or cause water damage to the occupant of the floor below. General civil liability law makes the insured liable for this damage, notably when a fault or a thing in its custody caused the loss. Neighbors' and third parties' recourse cover insures this liability for events covered by the property policy, mainly fire, explosion and water damage. It differs from general liability, which covers damage caused by the insured's activity, and from tenant's liability, which concerns damage caused by the tenant to the leased property itself. Its limit must be sized to the site's surroundings: a workshop adjoining a high-value warehouse or located on the ground floor of a residential building is exposed to recourse claims out of all proportion to the value of its own property, and a standard limit can prove far too low.
Textbook case: a fire starting in a small carpentry workshop, whose property is worth 200,000 euros, spreads to a neighboring electronics distributor's warehouse and destroys 5 million euros of stock. The distributor's insurer pays it, then recovers from the carpenter; the carpenter's neighbors' recourse cover, limited to 1.5 million, leaves 3.5 million to be borne personally.
Follow the research
One letter a week. First, the week's underwriting note, when one is published: a dated, argued decision, signed by Paul Bernardski. Then what the observatory published on cyber risk, political risk and insurance. No account, no tracking.
No spam, one-click unsubscribe, no data ever sold.