Private liability insurance answers one specific question: what happens if you cause damage to someone else? It does not reimburse your own belongings. It steps in when a third party claims compensation from you.
Where the obligation to compensate comes from
Insurance does not create liability: it covers it. Liability itself arises from the law of obligations (OR/CO), which provides that whoever unlawfully causes damage must make it good. The Civil Code (ZGB/CC) also provides, in its Article 333, for liability of the head of household for damage caused by minors or persons under general deputyship placed under their authority.
In other words, the obligation to pay exists with or without insurance. What insurance changes is who pays the money — and the fact that an insurer examines the claim rather than you alone.
Is it compulsory?
No. No federal law requires you to take out private liability insurance. It is optional, unlike, for example, motor vehicle liability insurance.
That said, in practice it is very often required. Many landlords and letting agencies make it a condition of signing a lease, because an uninsured tenant who damages the flat represents a financial risk for the owner. A contractual requirement is not a legal obligation, but it affects you just as much.
What it covers, in principle
Private liability contracts are traditionally built around two types of damage caused to third parties.
- Personal injury: the consequences of harm to another person's health or physical integrity.
- Property damage: the destruction of or damage to property belonging to others.
Often added to these are financial losses that result directly from one or the other, and cover for defending against unjustified claims — an often forgotten aspect, even though contesting an excessive claim has a cost.
Everyday examples
- You let a bath overflow and the water damages the ceiling of the neighbour below.
- Your child breaks a shop window.
- You knock someone over on your bike and that person is injured.
- You damage the parquet floor of the flat you rent.
The last example deserves a word, because it surprises people: the flat you rent does not belong to you. Damage you cause there is therefore damage to a third party, and falls under the logic of liability, not of insuring your own belongings.
The difference from household contents insurance
The distinction comes down to one question: who owns the damaged item?
- Your neighbour's sofa, ruined by your water leak: liability.
- Your own sofa, ruined by the same water leak: household contents insurance.
- The owner's parquet floor: liability.
So the two types of cover do not overlap: they respond to different situations, and having both is not duplication. They are also frequently sold together, which adds to the confusion.
Fault is not always required
Swiss law does not make all liability depend on personal fault. Alongside liability for unlawful acts, the Civil Code provides that the head of household is liable for damage caused by minors or persons under general deputyship placed under their authority, unless they prove that they supervised them in the customary manner and with the care required by the circumstances. The burden of proof is therefore reversed: it is for them to show their supervision, not for the victim to show their negligence.
That is why “but I wasn't the one who did it” does not always settle the matter. A child, an animal, carelessness without intent: the third party's claim is still directed at the household, and it is the cover that decides who actually pays.
It also explains why contracts define carefully who is insured. Depending on the policy, it may be the policyholder alone, or everyone living under the same roof — a difference that only shows up when you read the general terms and conditions, and that matters on the day the damage is caused by someone other than you.
What private liability insurance does not cover
Private liability insurance covers private life. It does not cover professional activity, which falls under professional or business liability insurance, nor road traffic, which falls under motor vehicle liability insurance — which, by contrast, is compulsory by law.
Nor does it cover your own belongings: that is the job of household contents insurance. And it does not turn deliberate damage into an insurable claim; contracts generally exclude damage caused intentionally, and provide for reductions in cases of gross negligence.
Two policies with the same name, two different covers
Private liability insurance is not a product standardised by law, unlike the benefits of basic health insurance. The content depends on the general terms and conditions, and two policies with the same name can cover different things.
- The sum insured and the sub-limits that apply to certain risks.
- The excess, which may vary by type of claim.
- How damage to rented or borrowed items is treated.
- The insured persons: the policyholder alone, or the whole household.
- The geographical scope of cover, particularly abroad.
- Reduction clauses in cases of gross negligence.