Coverage

Coverage refers to damage that falls within the scope stipulated by the insurer in the insurance conditions.

If the policyholder has coverage, a check is carried out in the event of a damage event to determine whether the liability claim made against the policyholder is legally justified, i.e. whether justified claims are to be reimbursed or whether unjustified claims are to be defended against (so-called passive legal expenses insurance in indemnity insurance). The indemnity insurance then does everything that the policyholder - possibly advised by a lawyer - would otherwise have to do themselves, namely to compensate for the damage.

The terms liability and coverage are often confused or lumped together:

• Liability is the abstract contractual or legal basis for a claim, according to which there is an obligation to pay compensation.
• Coverage is the part that an insurer assumes from this liability based on its insurance conditions. Ideally, all liability cases should also be covered. However, since there are always certain exclusions in the insurance conditions, coverage is never 100%.

So-called all-risk coverage, which offers very extensive scope of insurance (coverage) is recommended.

exali Indemnity Insurance includes all-risk coverage.
Get further information on Professional Indemnity Insurance for Digital Professions from exali.com.

(See also statutory liability, contractual liability, all-risk coverage)