A Taste for Risk – Chronicles of Luxembourg Insurance Law

Property and casualty insurance

“Insurance under which the insurer’s benefit depends on the occurrence of an uncertain event causing damage to a person’s assets.”

Example: Home insurance covering fire or water damage.

Personal insurance

“Insurance under which the insurance benefit or premium depends on an uncertain event affecting a person’s life, physical integrity or family situation.”

Example: Life/death insurance.

Indemnity insurance

“Insurance under which the insurer undertakes to provide the benefit required to compensate all or part of the loss suffered by the insured or for which the insured is liable.”

Examples:

• Professional liability insurance compensating a client for an error or fault;
• Comprehensive home insurance covering the repair or replacement of damaged property.

Fixed-benefit insurance

“Insurance under which the insurer’s benefit does not depend on the extent of the loss suffered.”

Examples:

• Travel assistance insurance providing a fixed allowance for medical expenses incurred abroad;
• Death insurance paying a fixed lump sum to the beneficiary, regardless of the actual economic value of the financial obligations left behind.

Liability insurance

“Insurance intended to protect the insured against any claim for compensation arising from the occurrence of the damage covered by the contract and, within the limits of the cover, to protect the insured’s assets against any debt arising from established liability.”

Examples:

• A doctor’s professional liability for medical error or negligence;
• A director’s liability for mismanagement;
• Parents’ liability for acts committed by their minor children.
• Property insurance

“A category of property and casualty insurance in which the insured event affects a specific asset – movable or immovable, tangible or intangible – in which the insured has a direct interest. This insurance is intended to protect and preserve individually identified assets forming part of the insured’s estate.”

Examples:

• A building;
• Construction machinery;
• A work of art;
• A receivable;
• A crop.

Survival insurance

“Insurance under which benefits are payable only if the insured is alive on the date specified in the contract. The insured risk is the survival of the insured person until that date. This insurance enables the insured to protect against financial difficulties at the end of their working life and to maintain an adequate standard of living in addition to statutory social security benefits.”

Example: Pension or retirement savings insurance.

Death insurance

“Insurance under which the insurer’s benefit is triggered by the death of the insured. The insured risk is the death of the insured person, which gives rise to payment of the benefit to the beneficiary. The purpose of such insurance is to protect relatives or compensate for their economic dependence on the insured.”

Examples:

• Death insurance paying a lump sum to a spouse or children;
• Funeral insurance covering the insured person’s funeral expenses.

Legal expenses insurance

“Insurance under which an insurance undertaking, in return for payment of a premium, undertakes to cover the costs of legal proceedings and provide other services directly related to the insurance cover, in particular for the purpose of:

a) obtaining compensation for loss suffered by the insured, whether amicably or through civil or criminal proceedings;

b) defending or representing the insured in civil, criminal, administrative or other proceedings, or against a claim made against them.”

Examples:

• Insurance covering the legal fees of an insured person prosecuted before a criminal court;
• An individual bringing proceedings to obtain compensation following a road traffic accident, with their insurance covering lawyers’ fees and expert costs.

Occupational accident insurance

“Compulsory insurance covering employees, civil servants, self-employed persons and certain equivalent categories against the financial and medical consequences of accidents occurring in the course of employment, while commuting to or from work, or of certain occupational diseases.”

Example: An employee injured while operating machinery at work receives reimbursement of medical expenses and daily allowances during their period of incapacity.

 

➡️ For any questions regarding insurance law, please contact Benjamin Nicolas.