Crap insurance is one of the most common, yet least understood insurance products in employment law. Employees often take it out automatically without knowing exactly what it covers, when it will actually help and when it will fail. In this article, we’ll take a look at bullshit insurance in a practical, understandable and legalistic way – so that you know when you can rely on it and when you need legal help.
A crap insurance policy is the popular term for employer liability insurance. It is therefore not an official legal term, but a term that has come into use because it is intended to protect employees from the financial consequences of a “simple mistake”. Typically, this refers to situations where an employee causes damage unintentionally in the course of their work – for example, by entering data incorrectly, mishandling goods or neglecting a duty.
Legally, the employee is liable for damages under the Labour Code. If he causes damage through negligence, his liability is generally limited to four and a half times his average monthly earnings. However, even this can mean tens of thousands to hundreds of thousands of crowns. This is where a stupidity insurance policy comes into play to cover these costs.
It’s important to know that crap insurance doesn’t cover everything. The insurance company will usually only pay if specific conditions are met: the damage must have occurred while performing work tasks, and it must not be intentional or alcohol-related. Gross negligence is often an exclusion or limited coverage depending on the specific conditions. Many employees mistakenly believe that the policy works automatically and without exclusions, but the reality is more complicated.
You have a crap insurance policy, but your employer wants you to pay damages? Not sure if you’re actually liable for the damages, or how much? At our legal clinic, we will explain your rights clearly, assess the employer’s and insurer’s actions and help you defend yourself against unjustified claims – quickly, online and without unnecessary delays.
In order for a no-fault insurance policy to fulfil its purpose, a situation must arise that complies with the policy conditions and the Labour Code. A typical example is a clerical error – an employee sends the wrong invoice, enters the wrong amount or omits an important step in the process, causing the employer a financial loss.
Another common scenario is damage to an item. A warehouse worker damages merchandise during handling, a technician accidentally destroys a part, or a company vehicle driver crashes a ramp while backing up. If it is proven that it was an unintentional act within the scope of employment, a jerk insurance policy may cover the damage.
In practice, however, how the employer claims the loss is important. It must quantify it correctly, prove the employee was at fault, and meet the statutory deadlines. If it makes a mistake in the process, the employee may defend himself – and this is where a crap insurance policy alone often proves insufficient.
We dealt with a case where a client worked as an accountant and mischarged VAT. Her employer claimed damages of CZK 180,000. However, thanks to her legal consultation with us, it turned out that part of the damage was not her fault. In the end, the insurance company only partially paid and the rest was successfully contested.
Are you facing a claim for damages? Consult an attorney before you pay or contact the insurance company .
One of the biggest risks of a crap insurance policy is the exclusions. Insurance companies commonly fail to pay if the damage is caused by intent, DUI, or gross negligence. Gross negligence, meanwhile, is not always clearly defined and is a frequent subject of litigation.
Another problem is where the employer has made a mistake in the organisation of work. If the employee acted according to instructions or within unclear processes, he or she may not be liable for the damage at all. Yet, it is often the case that the employer automatically reaches for compensation and the employee relies on a crap insurance policy to sort it out.
Late reporting of the loss is also a common mistake. Insurance policies set out deadlines and obligations, failure to comply with which can lead to a denial of benefits. The employee is then left without protection and with a large financial claim on their neck.
When you need an attorney: if the insurance company refuses to pay, your employer is asking you to pay more than the law requires, or you have doubts about your fault, legal help is crucial. We can help you assess liability and communicate with the insurance company.
Setting the policy limit is crucial when arranging a stupidity insurance policy. This should be appropriate to your income and the riskiness of the job. While a low limit means a lower premium, it may not be enough in the event of a claim.
It is also important to keep track of the extent of coverage. Some policies only cover property damage, while others cover financial damage. There are also differences in whether a junk insurance policy covers liability for deficiency in entrusted values or damage caused while driving.
From a legal perspective, we recommend checking that the policy complies with the employment contract and the employer’s internal regulations. Sometimes it turns out that an employee has obligations that are not covered by a regular no-fault policy.
Checklist
Not sure if your crap insurance policy actually covers your particular situation? Contact the Affordable Advocate legal clinic to get a clear answer.
Crap insurance is a useful tool, but it’s not a panacea. It covers the financial impact of a loss, not litigation. Once a conflict arises with an employer or insurance company, arguments, evidence and the proper interpretation of the Labor Code are the deciding factors.
Legal protection helps you to find out whether you are actually liable for the damage, how much you are liable for and whether the employer is doing the right thing. In many cases, the claim can be reduced or denied altogether – and then there’s no need to take out a crap insurance policy at all. We offer fast online employment law consultations. You will get specific advice, sample submissions and representation when dealing with your employer.
A stupidity insurance policy is the popular term for employer liability insurance and is designed to protect an employee from the high financial consequences of unintentional mistakes, which can be up to four and a half times the average monthly earnings under the Labor Code. However, it only works if strict conditions are met – the damage must be incurred in the course of work, it must not be intentional, alcohol or gross negligence, and the insurance and legal procedures for claiming it must be followed. Many people mistakenly believe that a no-fault policy covers everything automatically, even though it contains a number of exclusions, time limits and restrictions and does not address actual legal disputes with the employer or insurance company. Therefore, the key is not only getting the policy limits and scope of coverage right, but also being able to assess whether you are liable for the loss at all and to what extent. In practice, it often turns out that a combination of a crap insurance policy and early legal advice is the most effective way to defend against unjustified or overstated claims and avoid unnecessary financial loss.
Tip: Every employer is responsible for the health and safety of their employees. However, even if safety rules are strictly followed, sometimes injuries or illnesses can occur. Employers’ liability insurance exists for just these situations. Find out what it protects employers against.
No, taking out a bullshit insurance policy is voluntary. However, in practice, it is highly recommended.
Usually yes, if the loss occurred at the time the insurance was taken out; the specific assessment depends on the policy conditions.
Yes. The employer may seek compensation under the Labor Code; for negligence, the limit is typically 4.5 times, but there are exceptions, and the excess policy may have a lower limit or exclusions.
Yes, we can help you assess the claim, prepare documents and resolve the dispute.
Our team of experienced attorneys will help you solve any legal issue. Within 24 hours we’ll evaluate your situation and suggest a step-by-step solution, including all costs. The price for this proposal is only CZK 690, and this is refunded to you when you order service from us.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
In person and online. Just choose the appropriate service or opt for an independent consultation when you are unsure.
