Liability insurance for non-performance of obligations is the obligation of the insurer to make insurance payments in the event of damage to the insurance object.
The object of insurance is the property interests of the person insured on the contract (of the insured person) related to the obligation of the latter to pay damages in the manner prescribed by civil law, to pay a penalty to the creditor due to non-fulfillment (improper performance) of the obligation, including the contractual obligation .
Forms of responsibility
There are two forms of liability for failure to fulfill obligations:
- off-treaty or tort (Latin delictum – an offense).
Contractual liability for non- performance of obligations arises in relations between individuals or legal entities – parties to the contract in connection with its performance. Responsibility for breach of contract is expressed in the obligation of the violator to pay damages and pay penalties to the counterparty under the contract (Article 393 of the Civil Code of the Russian Federation).
Tort liability for non-performance of obligations arises between persons who are not bound by legal relations (contract), as a result of harm to a person or property, and is the responsibility of the person causing the harm to pay damages to the person who suffered the harm (Article 1064 of the Civil Code of the Russian Federation).
The Civil Code allows insurance of liability risk under a contract only in cases strictly limited by law and only in relation to the policyholder himself, which excludes liability insurance for liability for failure to fulfill contractual obligations imposed by a third party debtor.
Liability insurance for non-performance of obligations is provided for by the Civil Code of the Russian Federation for: banks insuring the return of citizens’ deposits; pawnshops, insuring at their own expense mortgaged property in favor of its owner.
The beneficiary in this insurance is always considered the lender – the party to which the insured is obliged to bear the corresponding responsibility.
Terms of liability
Responsibility for non-fulfillment (improper fulfillment) of contractual obligations arises in the presence of the following conditions:
- valid contract;
- non-compliance with the contract;
- loss from debtor;
- damage from non-compliance with the contract.