In brief: commercial general liability policies in Belgium

Standard commercial general liability policies

What constitutes bodily injury under a standard CGL policy?

In general, the definition of bodily injury is rather broad in general liability policies: it refers to any impairment of the physical integrity of a person or of a body, of which the cause or one of the causes is sudden and not related to the injured party itself (ie, excluding pre-existing conditions).

What constitutes property damage under a standard CGL policy?

In general, property damage refers to any kind of direct material or physical damage to goods.

What constitutes an occurrence under a standard CGL policy?

The terms ‘loss occurrence’ or ‘occurrence’ are not defined in the Insurance Act of 4 April 2014 (IA). In general, an occurrence of loss requires that the loss or damage has manifested itself or has become obvious to the victim who has suffered the damage.

How is the number of covered occurrences determined?

The number of covered occurrences must be determined in the general or special conditions of the policy. This is linked to whether the maximum insured limit applies per occurrence or per year (annual aggregate), or a combination of both. A specific point of attention is the definition of what constitutes a serial loss, and which insured limit and own risk applies to such a serial loss. None of these concepts is defined in Belgian legislation, nor is there any published case law that gives a more extensive definition of these concepts.

What event or events trigger insurance coverage?

Article 142 of the IA allows for two types of liability coverage: loss occurrence coverage and claims made coverage.

Under loss occurrence coverage, there is cover for loss that has occurred during the existence of the policy, including claims that were launched after the termination of the policy.

Claims made coverage is only allowed for certain types of liability policies. It must provide cover for claims that have been made to the insured party or the insurer during the existence of the policy for loss that has occurred during the existence of the policy. In such a claims-made coverage, there is mandatory cover for sunset clauses, which are defined as:

• claims made against the insured party or insurer within 36 months following the termination of the policy, when these claims are related to loss that has occurred during the policy and this risk is not covered by the consecutive liability policy; and
• claims made against the insured party or insurer within 36 months following the termination of the policy, when they concern acts or facts that have occurred during the existence of the policy and of which the insurer was notified.

In the case of property insurance, the policy is triggered when a covered event has occurred and has caused insured property damage or business interruption loss to the insured party, or both.

How is insurance coverage allocated across multiple insurance policies?

Article 142 of the IA provides for a regime of sunset clauses where a liability insurer can be, under certain circumstances, obliged to provide cover for claims made against the insured party or the insurer after the termination of the policy, when these claims are related to loss that occurred during the policy and this risk is not covered by the following liability policy.

More generally, article 99 of the IA contains a regime for the coexistence of insurance policies that allows the insured party to claim compensation (up to the amount of damage actually suffered and up to the insured limit) from the insurer of his or her choice. In such a case, the insurers will then divide the compensation among themselves based on either the allocation key provided in article 99, section 2 of the IA or based on other (sector) agreements between them.