Answers to client questions
Here I collect the answers to the questions clients actually ask me. Each answer sets out when it applies, what can change it, what to check in the policy and what the typical mistake is. The library is added to regularly.
Construction (CAR/EAR)
Does a CAR policy cover subcontractors' mistakes?
A CAR policy can cover damage caused by subcontractors' work, but only if the subcontractors are included among the insured parties and the policy…
Reviewed 20 July 2026
Read when CAR covers subcontractor errors →Does a CAR policy cover the existing building during a refurbishment?
A standard CAR policy covers the construction works, not the client's existing building – that can be included only through a separate section of…
Reviewed 20 July 2026
Read when CAR covers the existing building →Bonds and guarantees
How does an insurance bond differ from a bank guarantee?
Legally both perform the same function – the client receives security. The practical difference: a bank guarantee normally uses the bank credit limit…
Reviewed 20 July 2026
Compare a bank and an insurance guarantee →Why does the insurer require the owner's guarantee for a bond?
Because a bond is not classic insurance but a guarantee: if the client calls it, the insurer recovers the amount paid from the company by way of…
Reviewed 20 July 2026
Understand why an owner guarantee is required →How do you plan a bond limit when there are several construction sites at once?
Plan the limit on the total of all bonds in force at the same time, not on a single project: add up the bid, performance, advance payment and…
Reviewed 20 July 2026
Find out how to plan a guarantee limit →Plant and machinery (CPM)
Does a CPM policy cover machinery overturning?
Overturning during the work process is one of the risks a CPM (plant and machinery) policy can cover – unlike comprehensive motor insurance (KASKO),…
Reviewed 20 July 2026
Check CPM cover when a machine overturns →Does a CPM policy cover machinery while it is out on hire?
It can be arranged, but it should never be assumed automatically: the hire activity has to be disclosed openly to the insurer, and the policy has to…
Reviewed 20 July 2026
Check CPM cover while plant is on hire →Property and BI
How do you choose the business interruption (BI) indemnity period?
The indemnity period has to be as long as it realistically takes to restore the business fully after the largest likely loss – including design,…
Reviewed 20 July 2026
Find out how to choose the BI period →Why is a three-month BI period often too short for a business?
Because in three months you usually only manage to assess the loss, receive the claims decision and order the first works – not to restore the…
Reviewed 20 July 2026
Understand why three months of BI is too short →What is a first loss limit in property insurance?
A first loss limit is a form of cover where protection is bought not up to the full value of the property, but up to a set amount – the largest loss…
Reviewed 20 July 2026
Understand the first loss limit →Directors' liability (D&O)
Does D&O cover a claim by an insolvency administrator?
Not always – and this is exactly the point that turns two outwardly similar D&O policies into completely different products. Some quotes carry a…
Reviewed 20 August 2026
Read about the insolvency exclusion →What do Side A and Side B mean in a D&O policy?
D&O is not one cover but several parts. Side A protects the officer personally when the company does not pay or is not permitted to. That is not only…
Reviewed 20 August 2026
Understand Side A and Side B →Does D&O cover a claim brought by the company itself?
Most often yes – and that matters, because in Latvia the company itself is the most typical claimant against its own board member. The so-called…
Reviewed 20 August 2026
Read about insured vs insured →How long after the policy ends can a D&O claim be notified?
For as long as the policy's extended reporting period (discovery period) allows, and in Latvian quotes that varies enormously – from a few dozen days…
Reviewed 20 August 2026
Find out about the notification period →Can a newly founded company buy D&O?
Not from every insurer. Some do not offer D&O to companies that have been trading for less than two or three years – the reasoning is that without a…
Reviewed 20 August 2026
Read about D&O for a new company →Liability and energy
Does a company's general liability policy cover its own defective product?
Usually no: products liability cover pays for the loss your defective product causes to third-party property or health, but not the value of the…
Reviewed 20 July 2026
Check whether liability covers your own product →Does a BESS project need business interruption (BI) cover?
In practice it is almost always worth assessing seriously: a BESS earns only while it is running, and after serious damage equipment deliveries can…
Reviewed 20 July 2026
Assess BI cover for a BESS project →Did not find your question?
Ask it directly – I will answer, and the best questions are added to this library.