Commercial insurance

Valid as of 06.05.2022

The terms and conditions of LHV commercial insurance describe the insurance cover, what to do in the event of a loss, and the principles for the compensation of damage.

LHV Kindlustus applies these terms and conditions of LHV commercial insurance (hereinafter the ‘terms and conditions’) when insuring companies for the purpose of insuring structures, movable property, operating profit, rental income, and civil liability. The terms and conditions also apply to other persons (self-employed person, non-profit association, etc.; hereinafter collectively a ‘company’ or the ‘companies’) if the insured object or insurable interest qualifies.

LHV commercial insurance (hereinafter the ‘commercial insurance’) offers companies the possibility to insure several insurance risks under a single insurance contract. Commercial insurance consists of three parts.

Property insurance compensates for damage to movable and immovable property caused by a sudden and unexpected event.
Business interruption insurance compensates for loss of operating profit, rental and leasing income, and fixed and other costs in the event of business interruption due to an insured event under property insurance.
General Third Party Liability insurance covers direct material damage caused to a third party in the course of the insured activities of the company, including legal costs incurred in defending against a third party’s claim.

The agreed insurance cover, including extensions of cover, limitations and other special conditions, will be stated in the insurance policy.

Before concluding an insurance contract, the policyholder must verify the accuracy of the information in the insurance contract and the suitability of the insurance cover, and read the terms and conditions.

The insurer is LHV Kindlustus (hereinafter ‘LHV’).

The policyholder is the person named in the insurance policy who concludes an insurance contract with LHV (hereinafter the ‘policyholder’).

Contact details for the insurer

Customer support
Mon–Fri 9 am–5 pm
699 9111
kindlustus@lhv.ee
lhv.ee

Claims adjustment
Mon–Fri 9 am–5 pm
680 1122
kahjud@lhv.ee
lhv.ee

Definitions

Limit of indemnity is the maximum amount up to which LHV will compensate you for damage caused by an insured event. The limit of indemnity may be set for a specific event, risk, property or object, and applies to a single insured event.

Loss event is any event that results in damage. The loss event may or may not be an insured event.

Insured object is the object specified in the insurance contract and covered by the insurance.

Insured person is the policyholder as well as the third party, whether named in the insurance contract or not, in respect of whom the risk is insured.

Insurance indemnity is a sum of money paid by LHV to compensate for property damage and costs agreed in the insurance contract as a result of an insured event (hereinafter also the ‘benefit’).

Insured event is an event set out in the terms and conditions in the event of which LHV must fulfil its obligations under the contract. Losses caused by the same sudden and unforeseeable event are considered as a single insured event.

Insurance cover is the insurer’s obligation, limited by the terms and conditions of the insurance contract, to pay benefits or otherwise perform the insurance contract in the event of insured events specified in the policy.

Place of insurance is the building(s), interior(s) of the building or external territory (e.g. immovable property) at the address indicated in the insurance contract where the insurance cover applies.

Insurance contract documents are the insurance policy, these terms and conditions of commercial insurance (hereinafter the ‘terms and conditions’) and other documents referred to in the insurance policy.

Insurance period is the period stated in the insurance policy during which the loss or damage caused by an insured event will be compensated.

Insurance policy is a document certifying the conclusion of an insurance contract issued by LHV (hereinafter the ‘policy’).

Sum insured is the maximum amount of money stated in the insurance contract up to which LHV will compensate for the damage caused by an insured event.

Insurance territory is the area where the insurance cover applies.

Persons equated with the policyholder is the insured person and the persons performing the insured person’s employment or service duties; the owners and legal possessors of the insured object; the persons for whom the policyholder is responsible for the performance of the obligations arising from the insurance contract (other than the obligation to pay the premium) or other persons who have the legal or contractual right to possess or use the insured object.

Insurable value is the value of the insured object or insurable interest immediately before the insured event.

Beneficiary is a person named in the policy who is entitled to receive an insurance indemnity in the event of an insured event or to claim other obligations from LHV as stated in the policy.

Fixed-term insurance contract is a contract that expires after the end of the insurance period.

Open-ended insurance contract is a contract that is valid until it is cancelled.

Property insurance
Insured object
The insured object is the structure (building, apartment ownership, facility, co- owned property, interior finishing, other parts of the building) and/or movable property (inventory and equipment, goods and other movable property) shown on the policy.
1. Building
  The building is a structure with indoor space and important parts permanently connected to the ground and separated from the outside by a roof and other external boundaries.
2. Apartment ownership
  An apartment ownership is an apartment, i.e. a spatially defined dwelling or non-residential unit together with a notional part of the co-owned property (e.g. roof of the building, load-bearing walls, staircase, elevator).
3. Facility
  The facilityis a construction, other than a building or part of a building (e.g. flagpoles, shelters), created by human activity and connected to the ground. A small building (e.g. a garbage collection point, a site accommodation) with a floor area of 20 m2 or less is also considered a facility.
4. Co- owned property
  The co- owned property in a building includes parts of a building that is co-owned by the insured person, including the building’s exterior finishing, main structures, foundation, roof, windows and doors, rainwater pipes, exterior lighting, stairs, elevators, interior finishing in common areas, and other common parts of the building.
5. Interior finishing
  Interior finishing are parts of the enclosed space(s) that serve as the place of insurance, the removal of which will not damage the permanence or appearance of the building or infringe the rights of other owners of the building or occupiers of the adjoining premises. The Interior finishing include, but are not limited to, doors and windows of the room, non-bearing partitions, permanent finishes on ceilings, walls and floors, built-in furniture and design elements, glass surfaces in the room, sanitary interior finishing throughout the room, and technical systems, including parts outside the building, which are the sole responsibility of the occupier of the insured room.
6. Parts of the structure
  1. The parts of the insured structure are, inter alia, the following:
    1. finishing, non-removable and built-in furniture and design elements;
    2. technical systems and utilities, including those parts extending outside the structure, up to the point of connection but not beyond the boundary of the property;
    3. elements permanently attached to a structure for the operation, use or safety of insured objects (e.g. a security camera attached to a car shelter).
  2. Parts of inventory and equipment described in clause 1.8 of the terms and conditions (including design elements not permanently attached to the premises) are not considered part of the insured structure.
7. Parts insured with the stucture
  Together with the structure, the following, located at the place of insurance, are insured with the limit of indemnity up to EUR 15,000:
  1. facilities, except for those facilities which are specifically provided in the insurance contract as insured objects (clause 1.3 of the terms and conditions);
  2. fuel for heating the stucture;
  3. liquid needed for the functioning of the stucture (e.g. water in pipes and tanks). Unless otherwise agreed in the insurance contract, the liquid will be indemnified only if the same insured event causes damage to other insured objects;
  4. landscaping. LHV will indemnify the reasonable and justified costs of restoring landscaping damaged as a result of an insured event.
8. Inventory and equipment
  1. Inventory and equipment are tangible property located at the place of insurance and are not classified as stuctures, goods or non-insurable property listed in clause 1.10 of the terms and conditions. Inventory and equipment may, inter alia, include furniture, printers, computers and production equipment.
  2. In the context of the terms and conditions, ‘equipment’ means machinery and equipment in the configuration specified by the manufacturer or their authorised representative, including accessories, supporting structures and other essential parts fitted to the equipment for its operation, use or safety.
  3. Insuring inventory and equipment without a property list
  4. In the absence of a property list, the insured object involves the following belonging to the insured person at the place of insurance:
  5. inventory and equipment entered in the balance sheet;
  6. inventory and equipment not entered in the balance sheet. In the event of an insured event, the insured person must provide proof of the presence of off-balance-sheet objects at the place of insurance by means of cost and other documents.
  7. Insuring inventory and equipment based on a property list
  8. If the policy has the indication to this effect, the insurance cover applies only to the objects indicated on the policy or listed in the property list included in the insurance contract.
  9. Inventory and equipment located outside the building, facility or place of insurance are covered only if the policy has the respective indication.
9. Goods
  1. The goods are products, raw materials, materials, semi-finished or finished products which are used in a production process or in respect of which the insured person has an intention to sell.
  2. Movables belonging to other persons which are in the possession of the insured person for the purpose of repair, maintenance or processing, or on the basis of another agreement, are also considered goods. These objects are subject to the insurance cover only if the policy has the respective indication.
  3. Goods outside a building or facility are subject to the insurance cover only if the policy has the respective indication.
10. Non-insurable object
  Unless otherwise stated on the policy, the insured object does not involve the following:
  1. structures built in the water;
  2. works of art and antiques, precious metals and stones;
  3. samples and prototypes, exhibition exhibits and models, and collections of objects;
  4. digital screens installed on the outside wall, roof or external territory of a structure;
  5. cash and digital money, securities and documents, plans and drawings;
  6. living organisms, including animals, birds, fish, plants and fungi;
  7. greenhouses;
  8. paved roads, soil, railways, bridges and tunnels;
  9. motor vehicles, aircraft and vessels subject to registration;
  10. mobile machinery, tractors and other motorised work vehicles;
  11. regularly replaced parts or consumables (e.g. drill bits, cutting discs, lubricants, filters, and bulbs), unless the same insured event caused damage to other parts of the insured equipment;
  12. underground equipment. In the context of the terms and conditions, non-insurable underground equipment does not include equipment located on the 0 floor of a stuctureor parts of the technical system of a structure and other parts installed for the operation, use or safety of the stucture;
  13. mobile communication antennas;
  14. goods in transit, goods in customs and excise warehouses;
  15. weapons and their parts, ammunition and explosives.
Insurance cover
1. An insured event is a sudden and unexpected occurrence during the insurance period, including loss, damage, theft or robbery, which results in the loss of, destruction of or damage to the insured object and which is not excluded by clause 3 of the terms and conditions.
  If the policy so states, the insured event also includes:
2. damage to the quality part of the insured object as a result of substandard workmanship or faulty construction.
  In the event of damage caused by faulty construction, substandard workmanship, unsuitable or defective materials or products, LHV will compensate for damage to the quality part of the insured object caused by a sudden event;
3. damage caused by snow or ice having accumulated on the roof.
  Damage caused by the weight or movement of ice or snow falling on the roof within a short period of time (up to 72 hours);
4. ingress of rainwater and meltwater into the stucture.
  If precipitation or water from ice or snowmelt enters the stucturedue to substandard workmanship or faulty construction, LHV will compensate for damage to the insured object up to EUR 5,000. The policyholder must take measures to prevent repetitive damage. LHV does not cover the cost of repairing or replacing substandard workmanship or faulty construction, nor does it cover leaks, the sources of which the policyholder was or should have been aware of prior to the loss;
5. breakdown of the technical system of stucture.
  An insured event is the sudden and unexpected breakage or damage to the technical system of a structure caused by an internal failure, including:
  1. sewage or wastewater outflow as a result of a blockage in the stucture’s internal sewerage system;
  2. implementation of the automatic fire-fighting system;
  3. spillage from an aquarium or other container;
6. damage caused by regular repair work and maintenance.
  1. LHV will indemnify for loss or damage caused as a result of maintenance work on the insured building, including repair work for which the existence of a construction permit, -project or -licence is not compulsory and the purpose of which is to maintain or restore the condition of the structure for its intended purpose without altering its appearance, constructions or volume.
  2. Insurance cover for repair work and maintenance applies if the roof, doors and windows have been installed and all openings in the boundary structures of the insured building have been closed in such a way as to prevent precipitation or water from melting ice or snow from entering the building, and if there is no unattended and unassisted access by a third party to the interior space and/or building under construction.
  3. Repair work does not include works as defined in clause 2.7 of the terms and conditions.
  4. Damage resulting from repair work and maintenance is subject to a double insurance deductible;
7. damage caused by construction work.
  Insurance cover extends to damage to insured objects caused by construction work at the place of insurance.
  1. Construction work, i.e. building, is the erection, construction, installation, reconstruction, extension, demolition, alteration or complete replacement of the technical system of a building or a part thereof, and any other activity relating to a building which results in the construction of a building or in a change in its physical characteristics or functions. Construction is also the relocation of soil or cover to an extent that has a significant permanent impact on the surrounding environment and a functional relationship with the building.
  2. Insurance cover for construction work applies if the roof, doors and windows have been installed and all openings in the boundary structures of the insured building have been closed in such a way as to prevent precipitation or water from melting ice or snow from entering the building, and if there is no unattended and unassisted access by a third party to the building under construction.
  3. If, as a result of construction work carried out at the place of insurance, a fire breaks out and the insured object is damaged or destroyed as a result, LHV will indemnify for the loss even if the policy does not state this, but the policyholder has informed LHV of the plan to carry out the construction work before it starts. In the event of an insured event as described in this sub-clause, a double insurance deductible applies.
  4. Repair work and maintenance as defined in sub-clause 2.6 of the terms and conditions shall not be considered construction work;
8. intent or gross negligence on the part of the lessee or tenant.
  Insurance cover extends to damage to insured objects caused by the intent or gross negligence of the tenant or lessee;
9. equipment failure.
  1. The insured object is equipment up to ten years old, including electronic or mechanical industrial, manufacturing, medical, laboratory or other self-contained equipment and machinery. The age of the equipment is calculated from the date it was purchased new. If the date of purchase is not known, the age of the object is the time that has elapsed since the date of issue.
  2. The equipment is insured in the state of completion specified by the manufacturer or the authorised representative, including the accessories and other essential parts included in the insured equipment’s state of completion.
  3. Insured event of equipment failure
    An insured event is the sudden and unexpected damage to or destruction of the insured equipment due to internal breakage or other internal failure, including:
    1. short-circuit, excess and under-voltage not caused by external factors;
    2. internal mechanical and centrifugal forces;
    3. damage caused by internal parts of the insured equipment to other parts of the equipment;
    4. damage to high-quality parts of the equipment as a result of material and design defects.
Exclusions
LHV will not cover the following losses:
1. losses resulting from the events described in clauses 2.2–2.9 of the terms and conditions, unless otherwise stated in the policy;
2. damage and injury which arose, or the cause of which arose, before the conclusion of the insurance contract or the occurrence of which was apparent at the time the insurance contract was concluded;
3. damage occurring with a foreseeable frequency, such as an annual flood, and damage, the aggravation or recurrence of which the policyholder has failed to prevent intentionally or through gross negligence;
4. damage caused by leaving an insured object unattended, lost or forgotten and left in a visible place (e.g. loss of objects in common areas);
5. damage that has occurred gradually over a long period of time, including fatigue fracturing and cracking, crumbling, normal progressive wear, material fatigue, deterioration, corrosion, limescale, rot, decay, fungal damage, mould, injury or other damage that has occurred over a long period of time;
6. loss or damage caused by shrinkage or swelling of the insured object or parts thereof, unless the event was caused by an insured event;
7. cost of repairing or replacing a planning, design or construction fault, substandard work or detail;
8. loss or damage caused by landslides, subsidence of soil or of the insured building or parts thereof;
9. activities of pests, insects, rodents, birds and domestic animals. In the event of water or fire damage due to the aforementioned event, LHV will indemnify for the damage caused to the insured object as a result of the water or fire;
10. cosmetic defects, such as scratches, spots, stains, dents, tears, discolouration and other defects that do not affect the intended use of the insured object;
11. direct or indirect damage caused by nuclear and radioactive materials and the use of nuclear energy;
12. damage caused by blasting, mining and vibration;
13. loss or damage caused by expropriation, confiscation or similar event;
14. damage resulting from the use of the insured object in a way for which it was not intended;
15. damage for which the network operator, producer, seller, installer, maintainer, constructor or any other person in a contractual relationship is liable by law or by contract;
16. cost of maintenance and upgrading, and the cost of the part to be replaced in the course of such maintenance and upgrading, unless the need for such work arises as a result of an insured event;
17. loss or damage caused by loss of data, damage to or destruction of data files, malware and computer viruses, computer programs and software, internal hardware malfunctions, with the exception of loss or damage caused by the destruction of or damage to insured objects as a result of an insured event stated in the policy;
18. damage caused to the equipment during assembly, disassembly, adjustment, testing or trial operation;
19. loss or damage caused intentionally or through gross negligence by the policyholder or a person equated as such;
20. damage caused to a material or a semi-finished or finished product as a result of its processing;
21. loss or damage caused by the deterioration, melting or change in the nature of the goods, other than loss or damage caused by an insured event;
22. loss or damage caused by burglary committed by or in connection with a person employed by the insured person, unless the building or premises serving as the place of insurance were locked from such persons;
23. loss or damage caused by the taking or removal of an insured object without violence or threat of violence;
24. damage caused by theft (other than burglary and robbery), loss or shortage found during an inventory;
25. damage caused by an act of terrorism, uprising, civil commotion, strike, act of war, mass disorder, coup d’état, state of emergency or similar event;
26. damage related to kidnapping and/or ransom demands;
27. damage directly or indirectly linked to infectious diseases;
28. damage caused by environmental pollution.
Insurable value
1. Insurable value is the value of the insured object immediately before the insured event.
2. The insurable value of a building is its replacement value, i.e. the reasonable cost of rebuilding a new building of the same type and characteristics at the same place of insurance.
3. The insurable value of inventory and equipment is the replacement value or market value of the object.
  1. The replacement value is the acquisition cost, including transport and assembly costs, of a new object of equivalent use, technical specifications and composition.
  2. The insurable value of the object is its market value if the object was purchased second-hand and/or the depreciation of the object was more than 50% immediately before the event. The market value is the acquisition cost, including transport and assembly costs, of an object of equivalent use, technical specifications and completeness and similar wear and tear.
4. Insurable value of goods
  1. The insurable value of goods is their replacement value, which is the cost of replacing goods with the same characteristics and technical specifications, including transport costs. The insurable value of goods does not include the insured person’s share of profits or other costs.
  2. The insurable value of raw materials, finished and semi-finished products is deemed to be the acquisition cost of raw materials and the direct costs of production. The insurable value of raw materials and finished and semi-finished products does not include the insured person’s share of profits or other costs.
Costs of complying with damage prevention and mitigation requirements
1. In the event of a property insurance claim, the following shall be indemnified:
  1. justified costs of preventing and reducing the damage, even if they did not produce the desired result;
  2. justified costs of dismantling and cleaning up the damaged object, including the cost of removing the debris;
  3. justified costs of dismantling the damaged equipment, the cost of transporting it to the nearest repairer and back to the place of insurance, and the cost of assembling the recovered item;
  4. justified costs to be borne for the restoration of the insured object to comply with the requirements and precepts of the competent authorities, with the exception of the costs of repairing environmental damage.
2. The costs listed in clause 5.1 of the terms and conditions will be reimbursed up to 10% of the sum insured of the damaged insured object, up to a maximum of EUR 300,000, if the total amount of the property insurance loss and these costs exceeds the sum insured stated in the policy, and the costs have been agreed with LHV in advance.
Principles of compensation in property insurance
1. Following an insured event, the sum insured under the insurance contract is not reduced.
2. If LHV reimburses the cost of restoring the building, LHV will pay the benefit in proportion to the extent of the restoration.
3. If the policyholder does not want to restore the building, LHV will compensate the damage on the basis of a reasoned estimate of the cost of restoring the building, from which LHV will deduct a proportion proportional share of the physical wear and tear of the damaged building.
4. In the event of an insured event for inventory, equipment and goods, LHV will reimburse the cost of repairing the object. If the insured object has been stolen, robbed, destroyed or damaged in such a way that it cannot be recovered, LHV will indemnify the cost of the object at the replacement value or market value, subject to clause 4.3 of the terms and conditions.
5. LHV may replace the destroyed object with an equivalent object or pay the Insurance indemnity in cash up to an amount equal to the replacement value of the replaced object.
6. LHV has no obligation to compensate for the value of the remaining part of the object.
7. If LHV reimburses the costs of replacing the object, LHV has the right to the ownership of the replaced object. If the policyholder wants to retain ownership of the destroyed object, LHV will reduce the Insurance indemnity by the value of the object after the insured event.
8. LHV will reimburse any other costs stated in the terms and conditions or policy on the basis of a document proving the amount of these costs to a reasonable and justified extent.
9. In addition, LHV will indemnify for the damage in accordance with the general principles of indemnification set out in clause 38 of the terms and conditions.
Business interruption insurance
Insured object
The insured object is indicated in the policy:
1. operating profit. This is obtained by deducting the direct costs of goods or services sold, the fixed costs and the variable costs from the income from the sale of the economic activity shown in the policy;
2. fixed costs. These are the business expenses shown in the policy that are independent of changes in the volume of production, goods or services and are also maintained after the business interruption event. LHV will reimburse the fixed costs if it is economically and legally justified to continue to pay them, and these costs would have been incurred even if the insured event had not occurred;
3. rental or leasing income.
  1. Rental or leasing income is the remuneration payable under a contract to the insured person for the rental or leasing of the immovable property or part of the immovable property shown in the policy.
  2. Rental or leasing income does not include incidental expenses or other expenses incidental to the rental or leasing, unless otherwise agreed;
4. fines and penalties resulting from non-performance or improper performance of a contractual obligation and which are causally linked to the business interruption insured event;
5. other costs agreed upon in the insurance contract.
  If the policy so states, the insured object is any other expenses which the insured person may incur or retain in the event of an insured event.
Insurance cover
The business interruption insured event is an interruption or failure of an economic activity shown in the policy caused by a property insurance event.
Exclusions
With business interruption insurance, LHV does not cover:
1. loss or damage that has no causal link with an insured event concerning property insurance;
2. loss or damage caused by the fact that the policyholder has no money or other means to restore the pre-loss situation;
3. loss or damage caused by the loss or destruction of documents, plans, cash, securities or other written records and data media;
4. loss or damage caused by an act or omission of a state or local authority. If the restoration of the pre-loss situation is prolonged due to the action or inaction of the state or local authority, LHV will indemnify for the loss for the period of time which, according to an expert assessment, would have been needed to resume the same business activity if the state or local authority had not acted or failed to act, but not more than for the liability period stated in the policy;
5. loss or damage compensated by a third party or under another insurance contract;
6. variable costs and direct costs that depend on the volume of insured economic activities.
Loss reduction and prevention costs
1. LHV will reimburse the expenses incurred to mitigate and prevent business interruption (e.g. the cost of renting replacement premises, moving expenses), which have been agreed upon with LHV in advance.
2. The costs listed in clause 10.1 of the terms and conditions will be reimbursed up to 10% of the sum insured of the insured object related to the insured event, up to a maximum of EUR 300,000, if the total amount of the business interruption loss and these costs exceeds the sum insured stated in the policy, and the costs have been agreed with LHV in advance.
Insurable value
1. The insurable value is the operating profit, rental or leasing income, fixed costs or other agreed costs selected as the insured object, up to the maximum amount that would have been incurred during the liability period if the insured event had not occurred.
2. The insurable value is calculated on the basis of projections of the insured person’s economic performance over the liability period and the economic performance of up to three previous financial years.
3. The insurable value of fines and sanctions is the limit of indemnity stated in the policy.
Liability period
1. The liability period is the maximum period stated in the policy for which LHV will pay the business interruption benefit.
2. The effective liability period starts at the moment of the occurrence of the insured event in the event of property insurance and ends when the insured person reaches the economic situation they would have been in if the insured event had not occurred, but no longer than the period stated in the policy.
Principles of compensation in business interruption insurance
1. Following an insured event of business interruption, the sum insured under the insurance contract will not be reduced, unless the insured object is the fines and penalties set out in clause 7.4 of the terms and conditions, in which case the limit of indemnity will be reduced by each benefit paid.
2. In the event of an insured event, LHV will indemnify the loss incurred for the period of business interruption starting at the time of the insured event and ending with the achievement of the pre-loss economic situation, i.e. the situation the insured person would have been in if the insured event had not occurred, but for no more than the liability period stated in the policy.
3. When calculating the amount of the business interruption loss, account is taken of all the circumstances that might have affected the company’s results if the insured event had not occurred (e.g. seasonality, market situation).
4. The business interruption benefit is subject to the underinsurance and overinsurance provisions set out in clause 39 of the terms and conditions.
5. If the under-insurance provision in clause 39.2 of the terms and conditions applies to the property Insurance indemnity, the under-insurance provision will also apply to the business interruption benefit to the same extent. If LHV refuses to indemnify the property insurance loss in whole or in part, LHV has the right to refuse to pay business interruption compensation in the same proportion.
6. If it turns out that the company does not resume the economic activity indicated in the policy, LHV will base the Insurance indemnity on the period that would have been needed to resume the same economic activity according to an expert assessment, but not more than for the liability period indicated in the insurance contract.
7. In addition, LHV will indemnify for the damage in accordance with the general principles of indemnification set out in clause 38 of the terms and conditions.
General third party liability insurance
Definitions
Third party, or injured party, is the person to whom the insured person has caused material damage and to whom the insured person is liable to pay compensation. The third party is neither a party to the insurance contract nor a member of the group of insured persons.
Insured activity is an activity of the insured person, as stated in the policy, in the course of which the insured person is liable to pay compensation in respect of a loss or damage to third parties.
Insured object is the pecuniary obligations arising out of the civil liability of the insured person (hereinafter the ‘liability of the insured person’).
Policyholder and insured person
1. The policyholder is the person named in the policy who has concluded an insurance contract with LHV and who is obligated to pay the insurance premiums.
2. The insured person is the policyholder or the person named in the policy in respect of whom the liability is insured.
3. The policyholder is liable for explaining the terms and conditions of the insurance contract to the insured person and for complying with them.
4. The insurance contract extends to all natural persons working under the authority of and/or on behalf of the insured person in the course of their business activities in the performance of their duties (e.g. persons employed under an employment contract, agency workers, legal representatives).
5. The insurance contract does not cover legal persons who are used by the insured person in the performance of an obligation in the course of their business and for whose damage the insured person is liable in the same way as for damage caused by themselves (e.g. subcontractors).
Insurance cover
1. An insured event is the sudden and unforeseeable occurrence of property damage to a third party by the insured person during the insurance period, as a result of which the insured person becomes liable to pay compensation. The occurrence of the loss or damage must be causally connected with the activity of the insured person as fixed in the insurance contract and must be the cause of the loss or damage. The insurance contract does not cover the contractual obligations of the insured person, unless the corresponding obligation to indemnify would arise even without the concluded contract.
2. An insured event is not covered by the exclusions listed in clause 18 of the terms and conditions.
3. Obligations to indemnify for loss or damage caused by one and the same circumstance or event will be considered as a single insured event, subject to the sum insured or the agreed limit of indemnity stated in the policy and one insurance deductible. The insured event is deemed to have occurred at the time of the occurrence of the first loss or injury (giving rise to an obligation to pay compensation) which gave rise to the insured person’s obligation to pay compensation.
Extensions to insurance cover
The policyholder can choose the following extensions to insurance cover.
1. Contractual liability
  1. If contractual liability cover is included in the policy, the insurance contract extends to claims for damages arising from the insured person’s breach of their contractual obligations.
  2. The insurance contract does not cover claims for damages arising from the contract if the underlying agreements impose on the insured person conditions for compensation for damages which are stricter than the law and which restrict the rights of the insured person (e.g. extension of the limitation period for claims, agreements extending the scope of damages, simplified proof, forms of fault or liability).
  3. LHV will indemnify for damages resulting from the breach of a contractual obligation to the extent described in clause 22 of the terms and conditions.
  4. The contract covering the liability under the insurance contract must be concluded between the parties in a format that can be reproduced in writing.
2. Activities of subcontractor
  1. If subcontractor cover is included in the policy, the insurance contract extends to losses caused to third parties by a subcontractor used by the insured person in the course of their business if the loss or damage resulted from the insured activity included in the insurance contract and the insured person incurred an obligation to indemnify the third party.
  2. In the event of compensation for damage, LHV has the right to file a recovery claim against the person who caused the damage.
3. Third party property in the possession and use of the insured person
  1. If the policy provides cover for third party property in the possession of the insured person, the insurance contract extends to damage caused to third party property in the possession of the insured person. No compensation will be paid for loss or damage caused by loss of property or gross negligence of the insured person (unless gross negligence insurance cover is selected).
  2. Insurance cover for property belonging to a third party is valid up to the limit of indemnity stated in the policy for the insurance period.
4. Gross negligence
  If cover for gross negligence is indicated in the policy, the insurance contract shall extend to claims for which the underlying loss or damage was caused by gross negligence on the part of the insured person.
Exclusions
LHV will not indemnify claims for loss or damage caused by the following circumstances.
1. Dishonesty, intent and gross negligence
  Damage caused by a circumstance or event of which the insured person was or should have been aware prior to the conclusion of the insurance contract, caused intentionally or by gross negligence on the part of the insured person, unless the policy provides insurance cover as described in clause 17.4 of the terms and conditions.
2. Intoxication
  Damage caused by the insured person, their employee or servant, or the person for whom the insured person is liable, while intoxicated, i.e. under the influence of alcohol, drugs or any other form of intoxication.
3. Non-pecuniary damage
  Loss based on non-pecuniary damage (i.e. moral loss) and loss of income (other than loss of income resulting from personal injury to the injured person due to loss of income) and any other loss which is not direct pecuniary loss within the meaning of the terms and conditions as set out in clause 22.4 of the terms and conditions.
4. Provided non-contractual obligations
  The insurance contract does not cover claims for damages based on public admission of a charge, misappropriation of property, negotiorum gestio or unjust enrichment.
5. Producer and employer liability
  Damage caused by a defect in a product manufactured, sold or brokered by the insured person (claims arising from a defect in the product are covered by the producer’s liability insurance) and damage caused to the product itself that is manufactured, sold or brokered by the insured person, as well as damage caused by an accident at work or an occupational disease suffered by a person employed by the insured person (claims arising from such damage are covered by the employer’s liability insurance).
6. Professional liability
  Damage caused by the provision of a professional service. A professional service is, for example, legal, medical, accountancy, supervision and design services, as well as other professional advice, measurement and planning services, and services involving estimation and valuation. Professional liability insurance protects against claims arising from the provision of a professional service.
7. Compulsory insurance
  Damage covered by compulsory insurance (including motor third party liability insurance).
8. Damage covered by pension or other social security schemes
9. Damage suffered by the insured person
10. Claims between insured persons and claims of persons related to an insured person
11. LHV does not indemnify claims between insured persons or between the policyholder and the insured person. Similarly, LHV will not indemnify claims made against the policyholder or the insured person by a person directly or indirectly owned or controlled by the policyholder or the insured person (e.g. a subsidiary or associated company), as well as by a legal or contractual representative, family member or close relative of the policyholder or the insured person, or by a person who owns the policyholder or the insured person (e.g. a parent company or a private owner).
12. Damage to property belonging to a third party in the possession of the insured person
  Loss caused by damage to or destruction (including loss, theft, robbery) of third party property (including documents, data media) in the possession, use, custody, treatment, repair or maintenance of the insured person, unless the policy provides insurance cover as described in clause 17.3 of the terms and conditions.
13. Substandard service
  Damage resulting from the insured person’s failure to provide the service, improper performance of the service or inadequate quality of the service (for example, the cost of redesign, repairing or replacing work done inadequately).
14. Uninsured activity
  Damage that does not result from an insured activity specified in the policy.
15. Fines
  Public (e.g. financial penalties, fines, periodic penalty payments, imprisonment) and private (e.g. deposits, default interest, contractual penalties, guarantees, interest) sanctions.
16. Contractual liability
  Claims based on breach of contract and liability arising therefrom, unless the policy provides insurance cover as described in clause 17.1 of the terms and conditions.
17. Confidential information
  Damage caused by the infringement of personal rights, disclosure or making available of any confidential information.
18. Intellectual property
  Damage resulting from the infringement of intellectual property rights. Intellectual property rights are copyright and related rights and industrial property (e.g. trademarks, patents, industrial designs).
19. Non-professionalism
  Damage caused by the insured person’s lack of, or inadequacy to obtain, the necessary permits, qualifications or licences to carry out their activities.
20. Construction work
  Damage caused by construction, repair, renovation, demolition, fitting-out or alteration work. The insurance contract extends to such work only to the extent of operations carried out at the place of insurance for the purposes of day-to-day maintenance.
21. Disruption, interruption or shortage of water, gas, heat or electricity supply
22. Hardware, software and processors
  Damage directly or indirectly related to any computer or server hardware, software or processors.
23. Pollution and contamination
  Damage resulting from regular pollution and contamination of the environment (including requirements under the Environmental Liability Directive). The insurance contract only covers the clean-up costs of environmental pollution caused by a sudden and unforeseeable event and the reasonable costs of rescue operations to prevent further damage.
24. Long-term adverse effect
  Damage caused by long-lasting factors such as wear and tear, mould, mildew, wastewater, decay, corrosion, moisture, dust, noise and light (excluding damage caused by a sudden and unforeseeable event such as fire).
25. Rainwater and meltwater
  Repetitive damage caused by the ingress of rainwater or water from melting ice or snow into a building through any of its structures. The insurance contract is valid for the first insured event at the place of insurance (i.e. the damage is known not to have occurred previously).
26. Ground subsidence and movement
  Damage caused by subsidence or movement of the ground, including by earthquake, landslide, erosion or vibration.
27. Force majeure
  Force majeure is a circumstance beyond the control of the insured person. Including, but not limited to, damage caused by natural disaster (natural phenomenon of exceptional nature), war or warlike activity, coup d’état, uprising, terrorism, revolution, state of emergency, civil commotion, act of foreign enemy, strike, crime (including computer crime and cyber crime), expropriation of property, confiscation, nationalisation and any other similar event.
28. Explosives and weapons handling
  Damage caused by any explosive (including blasting), explosive-containing product, pyrotechnic article or weapons (including firearms, chemical weapons, biological weapons, and electromagnetic weapons).
29. Other environmental and health hazards
  Damage caused by asbestos, tobacco or tobacco products, toxic moulds, medicines, infections and contagious diseases of any kind (including AIDS, HIV and hepatitis), dioxins, genetically modified substances or organisms, animal pathogens, pesticides, radioactive radiation, nuclear energy, magnetic, electric or electromagnetic fields.
  LHV does not indemnify claims relating to:
30. managing landfills or waste treatment centres;
31. non-land-based, i.e. offshore and hydraulic engineering works;
32. blasting and ramming, underground and underwater works;
33. owning, operating, managing or using a harbour, quay, vessel, airport, railway or railway vehicle;
34. constructing, repairing and maintaining aircraft and vessels;
35. damage to aircraft and vessels;
36. work on airport premises and in the air traffic control centre;
37. operating and managing a water park, a ski resort and an amusement park.
Validity of insurance contract
1. The insurance contract is valid for the terms and conditions, period, place and territory of insurance agreed in it. If the policy does not specify the insurance territory, the insurance contract is valid for insured events occurring in the Republic of Estonia.
2. The insurance contract is valid for claims made against the insured person within three years after the end of the insurance period, but for which the act giving rise to the damage occurred during the insurance period. The insured person is obligated to inform LHV of the claims made against them as soon as possible.
3. If the cover of the insurance contract extends outside the Republic of Estonia, the law is applied on the basis of the Private International Law Act. However, insurance cover does not apply to damage claims governed by the law of a country other than the country indicated as the insured territory.
Sum insured, indemnity limit and insurance deductible
1. The sum insured is the amount shown in the policy, which is the maximum payout of all benefits (including legal and expert fees) payable during the insurance period.
2. The indemnity limit is the maximum amount of indemnity payable per insured event, per legal and expert fees, per insured activity, per type of loss or per insured risk, as stated in the policy. The indemnity limit is not added to the sum insured, but is included in it.
3. Insurance deductible is the amount shown in the policy which is payable by the policyholder in the event of an insured event. For claims arising out of the same insured event, the insurance deductible is calculated only with regard to the first payout of the Insurance indemnity.
Legal costs
1. Legal costs are defined in the terms and conditions as the extrajudicial legal, court and expert costs incurred in defending and pursuing claims for damages against the insured person.
2. LHV will reimburse legal costs if they are necessary to defend and prosecute claims for damages arising from the insured person’s insured activities. LHV will also reimburse legal costs if the claim against the insured person later proves to be unfounded.
3. Only legal costs previously agreed upon with LHV will be reimbursed.
4. LHV will not reimburse legal costs if compensation is excluded by the terms and conditions.
5. There is no insurance deductible for legal costs.
6. The insured person is obligated to reimburse LHV for the amount of legal costs reimbursed to them by LHV if the court orders a third party to reimburse legal costs in favour of the insured person.
7. LHV will be released from its further obligation to reimburse legal costs if, in the course of the proceedings, the cause of the loss or damage is found to be one of the exclusions referred to in clause 18 of the terms and conditions. LHV is discharged from their enforcement obligation at the moment they become aware of the exclusion applicable to the claim.
Insurance benefit and damage to be indemnified
1. An insurance benefit is a sum of money paid out to the policyholder to compensate for property damage and necessary legal costs incurred as a result of an insured event.
2. LHV indemnifies a third party for direct material damage caused by an insured person in the course of an insured activity fixed in the insurance contract.
3. Indemnifiable direct material damage is:
  1. damage to property, i.e. the cost of repairing or replacing an object belonging to a third party with an equivalent object as a result of its damage or destruction. If the object cannot be repaired or a new equivalent object cannot be purchased, LHV will compensate for the value of the object lost;
  2. personal injury, i.e. the following costs incurred by a third party as a result of damage to health, bodily injury or death: necessary medical and nursing care, loss of income due to temporary or permanent incapacity for work, funeral expenses, loss or reduction of a dependant’s maintenance. The calculation of the loss of income is based on the average of the third person’s income subject to social tax for the last 12 months within the meaning of the terms and conditions.
4. LHV does not indemnify the following:
  1. non-pecuniary, or moral damage, which includes in particular the physical and mental pain and suffering of a third party;
  2. loss of income, excluding loss of income due to personal injury to a third party.
LHV right of recourse
1. The right of claim of the insured person against the person liable for the loss or damage will be transferred to LHV to the extent of the amount indemnified in the event of payment of the insurance benefit.
2. If there is an extension of insurance cover for subcontractor activities under the policy, in the event of loss or damage caused by these subcontractors, LHV has the right to bring a claim for recovery against the person who caused the loss or damage and was engaged in the economic activity after the insurance indemnity has been paid.
Safety requirements
1. For the purposes of compliance with the safety requirements, insured persons and persons used in the course of an economic activity are deemed to be persons equated with the policyholder.
2. The policyholder and persons equated with the policyholder are obligated to comply with the safety requirements arising from the legislation and the instructions for use.
3. The policyholder and persons equated with the policyholder have a duty to exercise reasonable care and to act with due diligence in order to avoid an adverse outcome.
4. The policyholder and persons equated with the policyholder are obligated to take measures to prevent repetitive loss.
Principles of compensation in liability insurance
LHV bases its compensation on the following principles.
1. LHV will make a decision on compensation within ten working days of receiving all the necessary information about the loss event. LHV will pay the policyholder the insurance indemnity within at least two weeks after the claim against the insured person has been deemed proven and justified and the decision on indemnification has been made and/or after a court judgment has entered into force. If part of the claim is not proven, LHV will only reimburse the proven part of the claim.
2. If more than one person makes a claim against the insured person in respect of the same insured event and the total amount of the claims exceeds the sum insured stated in the policy, LHV will indemnify the claims on a pro rata basis, based on the amount of the claims up to the sum insured stated in the policy (provided that the claims are made in time and LHV has not already indemnified other claims).
3. If the insured person is jointly and severally liable with other persons for damage caused to a third party (joint and several liability), LHV will base its calculation of the indemnity on the amount of the claim against the insured person and not on the division of the insured person’s liability between joint and several debtors.
4. When compensating for loss or damage, LHV will proceed on the basis of the legislation in force at the time of the insured event, the terms and conditions of the insurance contract, the sum insured stated in the policy, the limit of indemnity and the insurance deductible.
5. The sum insured and the indemnity limits for the insurance period will be reduced in proportion to the indemnity and legal costs paid out under the insurance contract. An additional contract can be concluded to restore the amount of sum insured and the indemnity limit.
6. In addition, LHV will indemnify for the damage in accordance with the general principles of indemnification set out in clause 38 of the terms and conditions.
Conduct in the event of loss event in liability insurance
In the event of a claim, the policyholder and/or the insured persons must:
1. immediately submit to LHV any claim for damages submitted to them, as well as notify LHV of the commencement of any legal or other proceedings which may give rise to liability against the insured person and of any circumstance which may result in the occurrence of an insured event, but no later than five days from the time when the insured person became aware of the circumstance or the submission of the claim. The insured person may not give any consents or promises related to the indemnification of damage before having agreed upon them with LHV;
2. inform LHV in a format that can be reproduced in writing at the earliest opportunity of any claim for compensation by a third party or if the third party waives the claim for compensation;
3. also follow the guidelines on what to do in the event of a claim set out in clause 37 of the terms and conditions.
Insurance deductible
Insurance deductible is the amount borne by the policyholder in the event of an insured event.
1. The insurance deductible is deducted from the Insurance indemnity payable. If the insured object has been damaged or destroyed as a result of more than one insured event, the insurance deductible will be applied for each insured event separately.
2. All losses, including claims arising out of the same sudden and unforeseeable event, are subject to a single, maximum insurance deductible.
3. Then insurance deductible for insured event of business interruption is the waiting period shown in the policy.
  1. From the day following the occurrence of the insured event, the waiting period indicated in the policy applies.
  2. If the period of business interruption falls within the waiting period, LHV will not reimburse the loss incurred, except for the costs of loss reduction and prevention as described in clause 10 of the terms and conditions, if they have been agreed upon with LHV in advance.
Safety requirements
LHV has the right to refuse indemnification or to reduce the indemnity if the policyholder and persons equated with the policyholder have not complied with the safety requirements established in legislation, the instructions and the terms and conditions and, as a result, damage or another aggravating circumstance related to the loss event occurred.
Fire safety
1. The company must comply with the fire safety requirements established in the Fire Safety Act, other legislation, operating and maintenance instructions, etc.
2. Adequate primary fire-fighting equipment must be available in the building and indoors.
3. Waste and rubbish must be regularly removed from the premises and territory of the company.
4. Waste and rubbish must be placed on the premises in such a way as to prevent the spread of fire in the event of ignition.
5. Excessive combustible loads (e.g. pallets and packaging material) must be removed from the workplace as soon as work is completed.
6. Evacuation routes and passageways in office, production and storage areas must be kept clear.
7. Smoking is only allowed in designated and furnished areas.
8. Fire work, work with open flames, heating of material, melting and other work with similar hazards may only be carried out in accordance with current legislation and by a suitably qualified person.
9. Fire doors, fire hatches and fire windows must be maintained at the prescribed frequency.
10. Fire doors will be closed, except for automatically operated doors which must be ensured an unobstructed means of closing.
11. Fencing and communications penetrations will be filled throughout the full thickness of the sheathing with a non-combustible material that does not reduce the fire resistance time of the sheathing.
12. Low-voltage and server rooms must comply with the fire safety requirements applicable to them.
Storage
1. Objects may only be stored in or in the immediate vicinity of a building in a designated area and in a manner that complies with fire safety requirements and other applicable regulations.
2. The storage of combustible materials must be in accordance with the applicable standards, including the compatibility of hazardous substances and a safe distance from the building.
3. Goods must be kept at a height of at least 12 cm above the floor in a space below ground level.
4. Evacuation routes, access to extinguishers and fire-fighting equipment must not be obstructed.
5. The area around equipment must be kept free of materials and products.
Use of equipment
1. The policyholder is obligated to comply with the legislation and official safety requirements in force in the Republic of Estonia (e.g. the Electrical Safety Act, the Equipment Safety Act, the safety requirements for electrical equipment and the electromagnetic compatibility requirements for electrical installations or equipment) and the safety requirements described in the terms and conditions of insurance.
2. When the equipment is implemented and used, the instructions for its installation, adjustment, use and maintenance, as well as the requirements for technical maintenance and condition must be followed.
Heating installations
1. The heating installation must comply with the construction design of the building or heating system.
2. When installing and using a heating installation, compliance with the designated safety distance, the instructions for its installation, setting, use and maintenance, the legislation in force and the requirements for the technical maintenance and condition of the heating installation is required.
3. Solid fuel heating installations (including stoves, cookers, fireplaces) installed in the building must be regulated and their safety must be certified by a competent expert.
Fire alarm
1. If there is a fire alarm, it must be switched on 24 hours a day.
2. Fire alarms will be designed, installed, configured, operated and maintained in accordance with the requirements for their technical maintenance and condition and in compliance with the applicable legislation.
Security alarm
1. If there is a security alarm, it must be switched on when leaving the place of insurance.
2. The security alarm will be such that it is activated in the event of a hazard and ensures that an alarm is transmitted.
3. The security alarm must be installed in such a way that the insured object for which burglary insurance cover has been selected is within the operating range of the sensors of the security alarm system.
4. Storage, construction, furniture, etc., must not reduce the operating range or sensitivity of the sensors of the security alarm system. Consideration should be given to the possibility of breaking into a building or space through a door, window, wall, roof or other means.
5. The policyholder is obligated to ensure that an employee of the security company or a representative of the policyholder inspects the insured building or room both inside and outside in the event of the activation of the security alarm system and the receipt of an alarm.
6. The security alarm must be in good working order and its operation must not be impaired by any act or omission on the part of the policyholder or persons equated with the policyholder.
7. The security alarm codes must not fall into the hands of a third party.
Locking
1. In the event of departure from the place of insurance, all windows, shutters and other openings in the building or room which serves as the place of insurance must be closed in such a way that it is not possible to enter the place of insurance without breaking or removing the latch(es) or barrier(s) preventing entry.
2. When leaving the place of insurance, safes and lockers must be closed and locked.
3. Keys and unlocking codes for locks, as well as keys and codes for security alarms, must not be kept in a place or in a manner that would allow third parties to gain access to them. If the key or code is lost or finds its way into unauthorised possession, the insured person must immediately change the lock or code.
Water supply, sewerage and heating systems
1. The policyholder is responsible for the maintenance of the water supply, sewerage and heating systems.
2. The water supply, sewerage and heating system in an unused or unheated building or part of a building must be drained, closed and kept empty.
Construction, repair and maintenance work
When carrying out construction, repair and maintenance work, one must comply with the safety requirements in the relevant field, the requirements arising from the Building Code and the manufacturer’s instructions for use, as well as other regulations and standards that apply to the work.
Conduct in the event of a loss event
In the event of a loss event, the policyholder must:
1. take measures to prevent or reduce further damage;
2. report the incident immediately by calling 112 if one suspects the intentional action of a third party or in the event of a fire or explosion, or otherwise call the relevant competent authorities or persons;
3. notify LHV of the loss event as soon as possible, but no later than five days after the loss event has occurred or has come to their knowledge;
4. maintain the damaged object in its post-damage condition and not to begin liquidating the damage until LHV or a person appointed by LHV has inspected the damage, but not later than seven days from the date on which LHV is notified of the loss event. The policyholder is allowed to take the steps necessary to prevent further damage and to minimise the damage;
5. retain the damaged object until a date specified by LHV, provided that LHV gives written notice to that effect;
6. follow the instructions given by LHV;
7. provide LHV with the necessary information about the circumstances of the loss event and the possible perpetrator of the loss, and allow LHV access to the damaged object;
8. take into account that, in order to establish the circumstances of the loss event, LHV may, inter alia, require the policyholder to submit:
  1. the documents proving the expenses incurred due to the loss event;
  2. a certificate issued by the police in the case of theft, vandalism, and intrusion;
  3. a certificate issued by the Rescue Board in case of fire;
  4. the explanations about the loss event.
General principles for indemnification
LHV bases its indemnification on the following principles.
1. In the event of an insured event, LHV will reimburse the direct and reasonable costs of restoring or replacing the insured object and other costs specified in the terms and conditions, less the insurance deductible specified in the insurance contract.
2. LHV will make a decision on compensation within ten working days of receiving all the necessary information about the loss event. If, for reasons beyond LHV’s control, LHV is unable to ascertain the total amount of the loss, LHV will first compensate for that part of the loss for which the amount of the loss is clear. LHV may extend the time limit for making a decision on indemnification for loss or damage for good cause, including in the event that compensation is dependent on the facts ascertainable in judicial or extra-judicial proceedings, including in the event that proceedings have been instituted in connection with the loss or damage, in the course of which the facts ascertained are relevant to the determination of LHV’s obligation to pay compensation.
3. If LHV compensates for the loss or damage caused in the event of an insured event, the policyholder’s possible right of claim (right of recourse) against the person who caused the loss or damage (including the lessee, service provider) shall be transferred to LHV.
4. LHV does not reimburse the part of the taxes (such as VAT) that are refundable by law.
Underinsurance, overinsurance and multiple insurance
1. The underinsurance and overinsurance provision applies only to property and business interruption insured events.
2. If, at the time of the insured event, the sum insured stated in the policy is more than 20% less than the insured value, LHV is liable for the loss in proportion to the ratio of the sum insured to the insurable value (underinsurance).
3. If the sum insured stated in the policy exceeds the insurable value, LHV will compensate the actual amount of loss (overinsurance).
4. If the insured person insures the same insurance risk with several insurers and the total amount of Insurance indemnity paid by the insurers exceeds the amount of the loss or the sum insured exceeds the insurable value, the insurers are jointly and severally liable (multiple insurance).
Obligations of the policyholder
The policyholder is obligated to:
1. pay the insurance premium in the agreed amount and in the agreed manner;
2. notify LHV of the loss or damage as soon as possible, but no later than five days from the date on which the loss or damage occurs or comes to their knowledge;
3. provide LHV with complete and correct information for the purpose of assessing the insurance risk and to inform LHV, when concluding the insurance contract, of all material circumstances of which it is aware that affect or may affect the decision to conclude the insurance contract on the agreed terms;
4. notify LHV of the occurrence of multiple insurance;
5. inform LHV at the earliest opportunity that the information provided to LHV turned out to be incorrect or incomplete;
6. allow the representative of LHV to inspect the place of insurance, the insured object and the documents and information necessary for the conclusion of the insurance contract;
7. explain to all persons equated with the policyholder the obligations and requirements arising from the insurance contract. A breach of obligations by such persons will be treated as a breach of contract by the policyholder;
8. inform LHV without delay of any increase in the insurance risk, the transfer of the insured object or the occurrence of circumstances having a material effect on the business (e.g. expansion of production activities, addition of hazardous activities to the place of insurance). An increase in the insurance risk is considered to be a situation in which the circumstances affecting the insurance risk, about which LHV has requested information at the time of concluding the insurance contract, have changed and as a result the probability of an insured event occurring has increased;
9. make every effort to prevent an insured event and minimise the damage;
10. avoid a possible increase in insurance risk;
11. surrender the stolen or robbed object to LHV upon its return after LHV has paid the insurance indemnity for it, or return to LHV the indemnity paid for the returned object;
12. return the insurance indemnity paid to LHV in the event that, after LHV has compensated the loss, circumstances precluding compensation arise or the loss is compensated by a third party;
13. allow LHV to investigate the circumstances of the insured event in order to establish the cause of the loss, the amount of the loss and the persons responsible for the loss, to involve experts where necessary, and/or authorise LHV to obtain information to establish the circumstances of the insured event. If the policyholder fails to comply with this obligation, as a result of which LHV is unable to determine the actual loss or other material circumstances, LHV will be released from its obligation to perform the insurance contract;
14. organise their accounting on the basis of the legislation of the Republic of Estonia and the applicable standards.
Obligations of LHV
LHV is obligated to:
1. compensate for the loss or damage caused in the event of an insured event on the basis of the terms and conditions, including the costs incurred by the policyholder in determining the loss or damage. LHV will reimburse the costs of hiring an expert and adviser if the policyholder has agreed these costs with LHV in advance;
2. familiarise the policyholder with the documents related to the insurance contract prior to the conclusion of the insurance contract and to keep confidential the information disclosed to LHV in connection with the insurance contract;
3. issue to the policyholder a replacement policy, as well as copies of the policyholder’s declarations of intent made in a format that can be reproduced in writing, and information and copies of documents affecting the policyholder’s rights or obligations under the insurance contract, provided that such action is not contrary to the law;
4. start handling the insured event immediately after receiving the notice of loss, and determine the amount of indemnifiable loss;
5. inform the policyholder, upon receipt of the notice of loss or damage, of the documents that the policyholder must submit to LHV to establish the cause and amount of the loss or damage;
6. make a decision on compensation for damage or refusal to do so no later than within ten working days after the receipt of all required documents and determination of the amount of damage and the circumstances of its occurrence;
7. pay the Insurance indemnity within a reasonable period of time, but not later than two weeks after the completion of the claims handling procedures and the decision on compensation, unless otherwise agreed. If LHV delays the performance of a financial obligation, it is required to pay default interest at the rate provided in the Law of Obligations Act;
8. reimburse the policyholder, to the extent agreed, for the costs incurred by the policyholder in preventing or reducing the loss or damage which the policyholder considered necessary, even if the incurrence of those costs did not produce the desired result. LHV must reimburse the costs incurred on the basis of its instructions up to the agreed amount, even if they, together with other compensation, exceed the sum insured stated in the policy;
9. refuse to pay an Insurance indemnity if the beneficiary is subject to a restrictive international financial sanction imposed on the basis of United Nations resolutions or the relevant legislation of the European Union or the Republic of Estonia.
Release from performing insurance contract
LHV has the right to refuse to compensate or reduce the Insurance indemnity if:
1. it is an event, as a result of which the damage caused is not compensated on the basis of the terms and conditions;
2. the damage has occurred to an object that is not insured under the terms and conditions;
3. the loss or damage has been caused intentionally or through gross negligence by the policyholder or a persons equated with the policyholder, or under the influence of alcohol or drugs, and this condition is causally connected with the loss or damage;
4. the policyholder has intentionally provided LHV with false or misleading information or has failed to provide important information concerning material facts of the insurance contract or the loss event;
5. the policyholder fails to pay the premium by the due date or by an additional deadline and the insured event occurs after the expiry of the additional deadline, unless the policyholder’s failure to pay is due to circumstances beyond their control;
6. the policyholder has failed to comply with safety requirements or other obligations under the terms and conditions or the law, and such conduct has a causal link with the occurrence or increase of the loss;
7. the insured person waives their right of recovery against the person who caused the damage or if LHV’s right of recourse proves impossible through no fault of the insured person (for example, exceeding the deadline for filing a claim, failure to submit the necessary documents);
8. the insured person compensates a third party for damage or recognises a claim for damages brought by a third party in a situation where the liability or extent of liability of the insured person is not clear;
9. if the payee is subject to a relevant international financial sanction imposed by the Office of Foreign Assets Control (OFAC), under relevant US legislation, or by HM Treasury, under relevant UK legislation.
Termination, cancellation and withdrawal from insurance contract
The insurance contract ends:
1. at the end of the insurance period;
2. upon cancellation of the insurance contract;
3. upon withdrawal from the insurance contract;
4. by agreement between the policyholder and LHV;
5. on other bases provided for in legislation.
LHV has the right to cancel the insurance contract, subject to the cancellation deadlines prescribed by law, if:
1. the policyholder has failed to comply with the insurance contract, including failure to pay the premium by the due date or by an additional deadline;
2. the policyholder has intentionally provided LHV with false information about the insurance contract and/or the circumstances of the insured event;
3. an insured event has occurred and LHV has made a decision to compensate or refuse compensation;
4. the insured risk has increased (including where the insured risk has increased independently of the policyholder and the policyholder does not agree to change the insurance contract retroactively from the date of the increase in the insured risk);
5. the insured object has been transferred;
6. other grounds for termination of the insurance contract provided for in the legislation appear.
The parties have the right to terminate an open-ended insurance contract at the end of the current insurance period by giving at least 30 days’ notice.
Withdrawal from the insurance contract
1. LHV has the right to withdraw from the insurance contract if the Policyholder has failed to notify LHV of material facts affecting the insurance risk when concluding the insurance contract and/or has knowingly provided false information (including deliberately avoided reporting a material fact). LHV may withdraw from the insurance contract within one month after it became aware, or should have become aware, of the policyholder’s failure to comply with the notification obligation.
2. If the policyholder has not paid the first premium within 14 days after the conclusion of the insurance contract, LHV may withdraw from the insurance contract until the payment is made. If the premium paid (including the instalment) is less than the amount due shown on the policy, the premium is deemed not to have been paid. LHV will be deemed to have withdrawn from the insurance contract if they do not bring an action to recover the premium within three months of the date on which the premium became due.
3. If the insurance contract has been concluded by means of communication, the policyholder has the right to withdraw from the insurance contract within 14 days of the conclusion of the insurance contract. The policyholder must submit an application for withdrawal to LHV in a format that can be reproduced in writing. In case of withdrawal, LHV will refund the premium paid. If LHV has provided immediate insurance cover to the policyholder, the policyholder has no right of withdrawal.
4. If the insurance contract has been concluded for a period of more than one year, the policyholder has the right to withdraw from it within 14 days of the conclusion of the insurance contract. The policyholder must submit an application for withdrawal to LHV in a format that can be reproduced in writing. In case of withdrawal, LHV will refund the premium paid. If LHV has provided immediate insurance cover to the policyholder, the policyholder has no right of withdrawal.
5. If the insurance contract has been cancelled or withdrawn from, the parties to the insurance contract no longer have any obligations under the contract from the date of termination. The rights and obligations of the parties, including the policyholder’s obligation to pay the premium to LHV, apply until the termination of the insurance contract.
6. If, as a result of an insured event, the insured object has been destroyed or the insurance indemnity has been paid in full during the insurance period, LHV is entitled to receive premiums for the current insurance period.
Notification
All notices necessary for the performance of the insurance contract will be given in a format that can be reproduced in writing.
Processing of personal data
LHV is entitled to process personal data relating to an insurance contract on the basis of the LHV Customer Data Processing Principles and to disclose information relating to an insurance contract to third parties who are entitled to receive the information on the basis of the LHV Customer Data Processing Principles.
LHV has the right to retain recordings obtained by means of communication or any other means in connection with the performance of the insurance contract and, if necessary, to use them as evidence of the declarations of intent made by the policyholder.
Limitation of claims under insurance contracts
The limitation period for claims under an insurance contract is three years. The limitation period will run from the end of the calendar year in which the claim becomes due.
Inconsistencies in insurance contract documents
In the event of inconsistencies in the insurance contract documents, the interpretation will be based on the presumption that the special terms and conditions stated in the insurance contract take precedence over the terms and conditions of insurance.
If the terms and conditions have been translated into a foreign language, the interpretation of the terms and conditions will always be guided by the Estonian language terms and conditions in case of dispute.

Commercial insurance

The terms and conditions of LHV commercial insurance describe the insurance cover, what to do in the event of a loss, and the principles for the compensation of damage.

Contact details for the insurer

Definitions

Property insurance

Business interruption insurance

General third party liability insurance

Insurance deductible

Safety requirements

Conduct in the event of a loss event

General principles for indemnification

Obligations of the policyholder

Obligations of LHV

Release from performing insurance contract

Termination, cancellation and withdrawal from insurance contract

Notification

Processing of personal data

Limitation of claims under insurance contracts

Inconsistencies in insurance contract documents

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