External Risk Cover
Coverage for losses to a third party for which the insured is liable. Contingent liability can be assumed—for example, for losses arising from product or service failure, where the insurer has assumed liability by providing a performance warranty.
Contingent liability insurance refers to a policy taken out by a business on the life of an employee or director who stands surety for the debts of the business. The amount of cover taken out should be equal to the loan amount.