Limiting liability: what can you arrange in advance?

Many entrepreneurs only come into contact with liability law when a conflict has already arisen. However, many risks can be limited in advance. By taking legal measures before problems arise, you reduce the chance of claims and limit possible damage.

Legal instruments to limit liability

There are various legal means to limit liability:

• ✓ Exoneration clauses: provisions in which liability is wholly or partially excluded
• ✓ Liability limits: a maximum amount above which no compensation needs to be paid
• ✓ Limitation to direct damage: exclusion of indirect damage or consequential damage
• ✓ Short expiration and complaint periods

These provisions must be reasonable and legally valid. Not every exclusion will hold up in court.

General terms and conditions: crucial but often underestimated

General terms and conditions are the instrument to regulate liability. In practice, however, we see that terms and conditions are often:

• ✓ outdated
• ✓ not aligned with the services provided
• ✓ incorrectly declared applicable

Without correct applicability, you cannot invoke liability limitations.

Insurance is not a complete solution

Liability insurance can cover risks, but:

• ✓ has exclusions
• ✓ does not always cover consequential damage
• ✓ does not replace a good contractual basis

Preventive legal advice

By having contracts and terms and conditions legally reviewed periodically, you prevent costly proceedings afterwards.