Insurance
ERICs are recognised legal entities with a legal personality, and are able to enter into contracts. ERICs are therefore eligible entities for a range of insurance policies.
Early on in their lifecycle, an ERIC should address their insurance requirements and liability within a wider consideration of risk. The extent and nature of the insurance should be considered as part of routine business risk assessment.
Because ERICs are quite diverse in nature, so are their insurance requirements. Every ERIC should have an idea of their risk register: what kinds of possible risks there are, and how should they respond to them (i.e. risk mitigation actions)
TIP
Include an insurance plan as part of the wider business plan.
Liability and debt
The ERIC Regulation states that ERICs are liable for their debts. The financial liability of the members for the debts of the ERIC shall be limited to their respective contributions to the ERIC.
If the financial liability of the members is not unlimited, the ERIC should take appropriate insurance to cover the risks specific to the construction and operation of the infrastructure. The required insurance depends on the nature of the ERIC: whether it’s single-sited or distributed, the nature of its task and possible risks arising, as well as its mode of operation (virtual/physical).
Currently, ERICs have a wide range of different types of insurance policies in place.
| Type of Insurance | What it covers |
| Professional indemnity | Covers legal costs in the event of legal action taken against an ERIC |
| Third party liability | Third-party insurance is a policy purchased by the insured (first party) from the insurance company (second party) for protection against the claims of another (third party). |
| Cyber-insurance [cyber-liability and privacy coverage] | Breach response costs following a breach event or a cyber-extortion threat; privacy regulatory files and expenses; damages and claims |
| Health insurance | Private health insurance |
| Travel insurance (for employees) | Travel insurance policies are designed to provide cover for many eventualities, including medical expenses, a trip being cut short or cancelled, and loss or theft of possessions |
| [Management Protection Insurance] Director’s insurance Directors’ & Officers insurance | The main cover under a management liability policy is directors’ and officers’ insurance (D&O), with optional protection for employment practices liability (EPL), corporate legal liability (CLL), and crime insurance. This covers the actions of the Director or Board of Directors |
| Business liability | Corporate legal liability (CLL) insurance is similar to D&O insurance but defends claims made against the company as opposed to individuals. These claims range from maladministration of a company pension, an employee benefit claim, breach of data protection or corporate identity crime (www.marshcommericial.co.uk) |