LIABILITY

Comments.
Rarely will INS pay a Liability claim before a Costa Rican law court assigns blame to an insured client: there are few out-of-court settlements. Courts generally reject claims for punitive damages, pain and suffering, etc., instead basing their awards on the material losses, medical costs and/or reduced earnings sustained by the claimant. For this reason, amount of insurance required is a fraction of what similar enterprises would require in other countries.

Claims are rare, although there have been some important claims made over the years and certain notorious events have taken place that have made the public aware of the possibility of seeking damages for malpractice, errors and omissions, etc. For this reason, premiums for cover, which were extremely low, are beginning to increase.

There are few cases where the Law demands that businesses have Liability coverage. For example, to date, tour companies engaging in white water rafting are not required to have Liability – but a recent accident causing the death of a rafter alerted the Government to the fact that this activity is not regulated, and incipient regulations will no doubt oblige rafting companies to have Liability policies in the future.

Coverages Available.
Premises liability, Manufacturers liability, Product liability, Employers liability, and a so-called Umbrella liability (which covers excess liability over the limits of liability on the base policies).

Product liability can be readily obtained for Central America and some other markets, but reinsurance restrictions may limit cover for countries such as the United States and other developed nations. It is unusual for Renters’ liability to be required.

Premiums.
Rates are computed based on exposure variables, such as sales volume, payroll volume, number of visitors, size of insured premises and other factors. Rates usually fall between 0.5 and 1.5% per annum. To the resulting premium, add 13% Sales Tax. Because the amount of Liability coverage required in this country is a fraction of what is customary abroad, Liability coverage is fairly inexpensive.

Disclaimer: This document is intended as a summary of most relevant points of the insurance policy; as such, it does not contain every provision stated therein.