General civil liability insurance

General civil liability insurance covers damages your company causes to third parties—specifically, harm to their health or property. Coverage extends to damages arising from business operations, the condition of premises, and products sold, as well as legal defense costs.

Who is this insurance relevant for?

Civil liability insurance is relevant for almost every company whose operations involve other people—such as clients, visitors, contracting parties, or subcontractors. It is also frequently required by clients themselves in service contracts and public procurement procedures.

Relevant if your company

receives clients or visitors on their premises
works at the client’s sites or premises
manufactures, imports or distributes goods
engages subcontractors
participates in public procurement or construction tenders
takes possession of client property — for repair, storage, or servicing

Probably not relevant if

Activities are carried out solely remotely, without contact with clients’ property or premises.
you provide only consulting services — then professional liability is more relevant
You do not have customer traffic or production operations, and you do not work at external sites.

In practice, there are few companies that operate entirely without civil liability risk. More often, the question is not “is it necessary,” but rather “what level of insurance coverage is required.”

What does civil liability insurance protect against?

The insurance covers damages to third parties—bodily injury, property damage, and related losses. It also covers legal defense and damage assessment costs, even if the claim is ultimately found to be unfounded.

Standard protection

Harm to a visitor’s or client’s health on your premises
Damage to the client’s property while working at their site
Damage caused by manufactured or sold products
Damage to rented premises
Legal defense and expert assessment costs

Can be expanded separately.

Entrusted property — clients’ items in your care
Damage caused by subcontractors
Non-pecuniary damage
Product liability for exports to the EU or third countries
Operations abroad — territorial expansion of protection

The scope of coverage is determined by two parameters: the sum insured per event and the annual aggregate—the total amount payable over the entire insurance period.

What does this insurance typically not cover?

Insurance does not cover damage to your own property, failure to fulfill contractual obligations, or fines and penalties. Environmental pollution and professional errors are generally not included in standard coverage—they require separate solutions.

Not included in the coverage

Damage to one’s own and employees’ property
Contractual penalties, liquidated damages, and late payment interest
Costs of reworking poorly performed work
Intentional actions and conscious disregard of risk
Environmental pollution without a separate surcharge
Cyber incidents and data breaches

Covered by separate products

Professional errors → professional civil liability
Harm to employee’s health → employer’s civil liability
Executive management solutions → Directors and Officers (D&O) liability
Own assets → business property insurance
Environmental pollution → environmental pollution liability insurance

Environmental pollution is a common misunderstanding. The Environmental Protection Act provides for responsibility for environmental restoration costs, which can reach hundreds of thousands of euros. A standard liability policy does not cover this risk. If your operation involves the use of chemicals, fuels or hazardous waste, this is worth discussing separately.

What determines the price of civil liability insurance?

The price is determined by the selected sum insured, the nature of operations and turnover, the number of employees, the geographical scope of coverage, claims history, and the deductible. The sum insured and the level of operational risk usually have the greatest impact.

Sum insured and annual aggregate. The main factor affecting the price: increasing the amount from €100,000 to €500,000 usually costs significantly less than expected.
Nature of activities. Construction, manufacturing, and the food supply chain are subject to stricter assessment than office or retail activities.
Annual turnover and number of employees. They are used as indicators of the scale of operations.
Geographical scope. Lithuania, the EU, or the world. Exports to third countries require territorial expansion and are assessed separately.
Production risk. Whether the product comes into contact with the consumer, whether it bears the CE mark, and the markets to which it is supplied.
Use of subcontractors. Their inclusion expands coverage and increases the premium.
History of claims. Vertinami paskutiniai penkeri metai.
Deduction. A higher deductible lowers the premium, but you will have to cover small claims yourself.

What to decide before taking out insurance

The most important decision is the coverage amount. It determines whether a serious incident will be covered in full or only partially.

Amount per event. It must correspond to the maximum realistically possible damage, not the average.
Annual aggregate. Annual aggregate limit. Several incidents could exhaust it sooner than you expect.
Contractual requirements. Check whether the client contracts specify a minimum insurance amount—this often determines the choice.
Subcontractors. If you use them, consider including them in the policy.
Entrusted property. This is relevant if you take possession of clients’ belongings—without a separate add-on, this risk remains uncovered.
Geographical scope. If you are planning exports or operations abroad, it is worth including this right from the start.
Deduction. Choose an amount that the company can cover without difficulty.

Why €100,000 is often too little. A single average incident—such as a fire on a client’s premises caused by equipment you installed—could exceed this amount. The company would have to cover the shortfall. For an active business, a limit of at least €300,000–€500,000 is generally recommended.

What you will need to fill out the questionnaire

We will retrieve the company name, address, and NACE code from the Centre of Registers—you simply need to enter the company code. It is useful to have the following ready in advance:

A description of activities — specifically what the company does and to what extent.
Annual turnover and number of employees
The desired sum insured and annual aggregate limit
Geographical scope of protection — Lithuania, the EU, or broader
Information about subcontractors, if you engage them
Claims and lawsuits over the past five years
Details of the existing policy, if valid — insurer, amount, and expiration date.

Important. If you currently have an unresolved claim or an active lawsuit, you must declare it before taking out the policy. Failure to do so could render the policy invalid for any future claims—a consequence far costlier than a higher premium.

The questionnaire takes about 6–8 minutes to complete. You can skip any fields that are unclear—the broker will clarify them.

Frequently Asked Questions

Is civil liability insurance mandatory?

It is not required for general business operations. However, many clients demand it in construction and service contracts as well as in public procurement specifications. For specific activities (such as construction), insurance is mandatory under the law.

What insurance amount is sufficient?

Depends on the activity and contractual requirements. For an active company, €100,000 is often too little — one average case may exceed this amount. In practice, it is usually between €300,000 and €1,000,000.

What is the difference between general and professional civil liability?

General liability covers physical harm—personal injury or property damage. Professional liability covers financial losses resulting from errors in service provision, such as faulty advice, design defects, or accounting errors.

Does the insurance cover damage caused by subcontractors?

Not automatically. Subcontractor liability is usually included via a separate policy endorsement. If you use subcontractors, you must specify this in the questionnaire; otherwise, damages may go uncompensated.

Is damage to clients' property in my care covered?

This is known as “entrusted property risk.” It is usually not included in standard coverage and is added separately. It is relevant for repair, storage, maintenance, and servicing activities.

Is the insurance valid while working abroad?

Standard coverage typically extends to Lithuania or the European Economic Area. Exports to third countries or operations outside the EU require a separate territorial extension.

What should I do if I already have an unresolved claim?

It must be declared before taking out or renewing the policy. Failure to declare it can render the policy invalid for all future claims; consequently, withholding this information costs far more than paying a higher premium.

Does civil liability insurance cover environmental pollution?

Generally, no. A standard policy does not cover pollution risk—this requires separate environmental pollution liability insurance or a special endorsement.

Related insurance products

General civil liability covers physical harm to third parties. These products cover areas that fall outside that scope.

Professional civil liability

Financial losses due to errors in the provision of professional services

Employer's civil liability

Damage to an employee’s health in the event of an accident at work

Directors and Officers Liability (D&O)

Asmeninė vadovų atsakomybė už priimtus valdymo sprendimus

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