Liability issues

One size does not fit all

A diverse range of liability topics are discussed at EU level, including cross-border insurance and emerging technologies. In relation to liability for new and emerging technologies such as artificial intelligence, Insurance Europe firmly believes that the existing liability regime — harmonised product liability (under the Product Liability Directive), complemented by national law covering all other areas of liability — ensures a well-balanced, coherent and cohesive liability framework that provides legal certainty for all. New liability rules should only be created if clear protection gaps can be shown, which Insurance Europe believes is currently not the case.

Insurance Europe supports the European Commission’s ongoing efforts to strengthen the EU single market. However, a “one-size-fits-all” approach to liability insurance would be extremely hard to implement. This is due to the legislative, judicial, linguistic and cultural differences between member states.

Neither can liability insurance provide unlimited cover or cover for every risk, since it is not possible to calculate the premiums that would be required to insure some risks or to offer unlimited cover for others. For the same reasons, compulsory insurance schemes only work if specific conditions are met. If they are not, an inappropriate scheme can do more harm than good.

Basic conditions needed for compulsory insurance

  • Sufficient data
  • Sufficient similarity in the risks
  • Sufficient insurance capacity
  • Adequate competition
  • Enough reinsurance capacity

Effects of a compulsory scheme if the conditions are not met

On the insurance market:

  • Less product innovation
  • Insufficient or no insurance
  • Less loss prevention/increased moral hazard

On individuals and businesses:

  • Unprotected individuals
  • Businesses unable to operate or grow
  • Higher premiums
  • Individuals/businesses over- or under-insured

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Nicolas Jeanmart

Head of personal & general insurance
+32 2 894 30 40

Claire Musch

Policy advisor, general insurance
+32 2 894 30 36