Public/general liability insurance
Cover for damage a business causes to third parties' persons or property during operations.
Definition
Public or general liability insurance (in the Netherlands the AVB) covers a business against claims for personal injury or property damage caused to third parties in the course of its activities. Employer's liability for harm to staff is typically included. The policy does not cover purely financial loss or professional advisory errors; those fall under professional indemnity insurance. Many B2B contracts require the supplier to carry this cover.
Example
A cleaning firm's public liability insurer pays for a client's laptop that an employee knocked off a desk and broke.
Why this is a business risk
A business without adequate public liability cover can face claims that exceed its balance sheet from a single incident, particularly where personal injury is involved. Contractual insurance requirements that are not monitored can leave a client exposed when a supplier causes harm but carries inadequate or lapsed cover. Financial-loss claims and professional errors are not covered by an AVB, so a business that advises as well as operates may have a coverage gap if it relies on the AVB alone.
How to manage it
- Verify that your AVB policy limit is sufficient for the scale of operations and the third-party assets you work near or with.
- When contracting with suppliers, include an insurance clause requiring them to maintain AVB cover and to provide a certificate of insurance on request.
- Check whether your AVB excludes specific activities relevant to your business and arrange top-up or sector-specific cover if needed.
- Complement AVB cover with professional indemnity insurance if your work involves advice, design or other professional services that could cause financial loss.
Legal references
Unless marked otherwise, references are to Dutch law (Burgerlijk Wetboek, the Dutch Civil Code); EU instruments such as the GDPR apply across the EU. This is general information, not legal advice. Other jurisdictions treat these concepts differently. Verify the current text and your situation with a qualified lawyer.
Frequently asked questions
Common questions about this term.