You are most likely part of the group of workers who serve in one contractor or subcontractor to another. Or maybe you are, in that of the entrepreneurs who have outsourced part of the work of their company. After all, a good part of the work activity carried out in the country is outsourced. As a result of this situation, a liability regime is established that affects the company that contracts with another. Whether you’re in the employee group or the employer group, you should know a little more about liability and cross-liability.
As a worker, you are exposed, to a greater or lesser extent, to suffering an occupational accident during the working day. But as an entrepreneur, you may find yourself in need of having to deal with the consequences of that work accident. So this article is about that, of cross and subsidiary liability in company relationships.
What is understood by civil cross liability?
The Spanish legal system establishes the obligation that all individuals have to compensate the damage caused, by action or omission, to third parties. It is about compensating the victims for material or personal damage suffered, provided that the event is not fortuitous or due to force majeure. And that obligation has a name: civil liability.
Civil liability requires three elements to concur:
- Person : referring to who causes the damage and must repair it, and who suffers it.
- Injury : It can take the form of damage or breach of contract and can affect the individual or their assets.
- Causation: it is necessary to have a ne xo causal link between the act or omission causing damage. Thus, no one has to answer for damages derived from acts of God or force majeure.
The origin of civil liability can be contractual or extra-contractual. Contractual civil liability is one where the breach of contract obligations may be grounds for sanction. Responsibility in tort compensation arising from damage or injury include that the injured should not have been.
In this post, we are going to focus on the differences between two forms of contractual liability.
What is cross liability?
When an employer contracts with a contractor or subcontractor to carry out the work or services of its activity , the workers of these companies go on to provide services for the main employer. And it will be this who must legally respond to possible bodily and material damages that the workers of the contracted or subcontracted company may suffer .
In summary, cross civil liability starts from the contractual relationship between the contracting company and the contracted or subcontracted companies, where the workers of these must be compensated in case of suffering damages on the occasion of the work activity carried out for the main company. This link is not strange if we think that although the employment relationship is between the worker and the contractor, the employee with the service he provides, is obtaining a benefit for the main employer.
In the field of cross-liability insurance, the workers of the contractor or subcontractor come to be considered third parties and therefore, to have, except for reasons of exclusion, insurance coverage in the event of suffering an occupational accident caused by the equipment, machinery, staff or facilities of the contracting company,
What coverage does cross liability insurance provide?
When the damage is restored, repaired or compensated for it, there is a capital loss , which sometimes puts the continuity of the company at risk.Therefore, first of all it is advisable to refer to who is recommended to hire this insurance. And as you may have deduced, it is a coverage designed for entrepreneurs and companies that frequently subcontract the performance of services or work directly related to their activity.
The cross civil liability insurance covers the expenses and compensation that the insured may incur, due to an event covered by the policy, caused to a worker of the subcontracted companies.
It is a freely contracted insurance, so the coverage limit will be the insured amount that you can contract.
However, civil liability declines when the injury occurs fortuitously, by force majeure or caused by the injured party himself.
Assumptions where there is cross CR
One of the assumptions that appears in all the manuals on cross civil liability is that of the construction company that contracts with others to carry out part of the construction work. The plumbers, formworkers or painters of the contracting companies are exposed to suffer an accident while rendering their services on the construction site. If one of the subcontracted workers suffered an accident when falling from a height or was hit by a machine owned by the main employer, the latter would have to respond civilly for the damages caused to the injured party.
We have another example in telephone companies. Typically they contract the wiring or antenna installation with a contractor, who in turn subcontracts the work to other companies. Workers in these companies run the risk of falling from the top of an antenna or being trapped in an underground line.
In both cases, the work carried out by the subcontractors constitutes work within the activity of the main company. In the first case they are necessary jobs in the construction of a building, while in the second they are the communication infrastructure.
What is subsidiary civil liability?
In the field of civil liability and insurance, we find another modality, subsidiary civil liability. As with cross civil liability, its purpose is to cover damages caused within the framework of the contractual relationship between the main company and the contractor and subcontractor. It is a guarantee created to compensate the victim when the perpetrator cannot do so.
At first glance, it may appear that both coverages are identical, however, they are very different from each other.
Differences between subsidiary and crusade liability
The fundamental difference between subsidiary and crossed civil liability is in what is the condition of the injured party in relation to the cause of the damage.
Thus, subsidiary civil liability is aimed at repairing the damage caused to a third party by the workers of the contracted or subcontracted company, while they provide their services for the contracting company.
Cross civil liability deals with injuries caused to subcontracted workers while providing services for the contractor, and they have not been caused by them.
In both cases, the property damage for the main company can be significant, so it is convenient to shift the responsibility to insurance.
It has become clear that when one person causes damage to another or to their property, they will be responsible for their restitution or repair. Entrepreneurs are not exempt from this obligation. Because they must answer for the injuries caused by their workers to a third party, as well as for the damages that they may suffer in their employment relationship and that have not been caused by them.
If we bear in mind these legal obligations, cross civil liability plays a leading role in contractual relationships with contractors. And displacing it, so that the insurer contributes severally, is a sign of patrimonial prudence.
Frequently Asked Questions
👆 What is exactly the difference between cross liability and subsidiary liability?
That is what this article is about, so, don’t be lazy and read the whole article carefully to find out.
👆 Are these types of liability different?
Yes they are, cross liability and subsidiary liability are different things.
👆 Do I need to have a cross liability?
No, you don’t in most cases, but it’s highly recommended and in some countries you need one mandatory, so I recommend you searching for your specific country instead of here.
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