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Liability insurance

Most people think that liability insurance coverage is unnecessary, but the reality is that it’s absolutely necessary. Liability coverage pays for damages that you caused to another person, which could include medical expenses, lost income, property damage, or pain and suffering.

Liability insurance

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Oftentimes, most insurance coverage works to cover you or your property and belongings. However, this kind of insurance protects you and also turns around and protects the other person involved. More so, you can buy this insurance for your personal use or for your business, as the case may be.

What is Liability insurance?

Liability insurance is a protection policy that protects individuals or a corporation from lawsuits for damages or injury.

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It is a broad type of insurance that covers legal costs and settlements when an individual or business is sued for damages or injuries.

So, it is designed to protect your assets against legal costs if, for example, you or one of your employees causes damage to someone else’s property, and are found legally liable.

Who can purchase liability insurance?

Basically, individuals, corporations, professionals like doctors, and governments can purchase this type of insurance.

Liability insurance may insure against a company’s legal liability, bodily injury, or property damage to an individual or to another person or company.

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Typically, it covers injury and property damage for the insured and their properties. And acts as a financial safeguard against the charges of negligence, bodily injury, or property damage caused by the insured.

How does it work?

Firstly, it works to provide protection to businesses, individuals, people in professional jobs, and people in jobs that render advice. Something done on the job or after can trigger a client or patient to file a legal claim or lawsuit. Liability insurance will provide protection against financial losses from claims resulting from personal injury or property damage.

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Types of liability insurance

Different types of liability insurance are necessary for different types of businesses.

General Liability

Ideally, general liability insurance is similar to a Business Owner Policy (BOP). But liability protects business owners’ policy from financial losses associated with property damage and bodily injury, including medical costs, legal fees, and other expenses. However, Commercial General insurance covers buildings and other structures.

Now, general Liability Insurance is a type of business coverage that covers the legal liabilities of a business. There are two basic types of general coverage:

  • Occurrence coverage, which covers the cost of claims made for bodily injury or property damage that occur during a specified time period,
  • Claims-made coverage is the claims that you can make against a company after their policy has expired.

professional liability insurance

Professional liability insurance (PLI) is a type of liability insurance that covers professional advice and services provided by a licensed professional.

For example, this liability covers real estate agents and lawyers. PLI policies protect against claims of negligence, errors or omissions, invasion of privacy, or other related liability.

Commercial umbrella insurance

Commercial umbrella insurance provides coverage for a variety of liability claims. Initially, these liability claims were not covered by business property insurance or general liability insurance for some reasons.

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Although this type of insurance coverage is more expensive than other types and it is recommended for businesses that face a high potential for third-party claims or lawsuits.

Commercial auto insurance liability

This covers commercial drivers, their vehicles, and their business. Moreover, it is different from personal auto insurance because it insures vehicles parked or vehicles used for commercial purposes.

Personal liability insurance

Firstly, Personal liability insurance covers injuries or damages that you cause to someone else.

Personal liability insurance does not cover your own injuries. Policies vary in what they cover, but if someone who got injured on your property file a lawsuit against you, then, you will need personal liability insurance coverage for yourself.

Bodily injury liability

Bodily injury liability insurance provides protection to those injured or killed on a person’s property.

More so, it covers the cost of any lawsuits, medical treatment, hospitalization, and funeral costs that the injured individual incurs as a result of the accident.

Property damage liability

Property damage liability insurance protects homeowners in the case of an accident.

For example, if a child trips and falls and breaks an arm, the homeowner may need to pay for that injury.

Any property damaged in the incident is also protected under the policy.

Umbrella insurance liability

Basically, umbrella insurance is a specific type of liability coverage. It is the money paid to an injured person, that kicks in when the limits of other policies have been exhausted.

For example, if someone slips and falls on your property, your homeowner’s policy will not cover you if you have an umbrella policy.

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How to get liability insurance

Liability insurance is typically sold as a packaged policy, including coverage for property damage liability, bodily injury liability, medical payments to others, and workman’s compensation.

Sure, you need to protect yourself from lawsuits and damages in the case of an accident. So, all you have to do is first, look around for great companies that provide such coverage.

Then, get the policy quotes from these companies. These give you an insight or understanding of what you can cover according to your capacity. And literally, most insurance companies offer free quotes.

Liability insurance covers such expenses as lost wages, hospital bills, and legal fees.

However, liability does not cover deliberate acts or criminal acts like cybercrime.

Example of liability insurance

When a company purchases an insurance policy, the company buys a type of protection.

The coverage will protect all the policyholders in the company. That is, everyone working in the company.

If the company causes an accident and injures someone, the owners of the company will exercise their liability coverage rights. If they damage someone’s property or product, they will also exercise their liability coverage rights. When they cause bodily injury, they will still exercise their rights to the fullest.

Insurance companies

  • The Travelers Companies
  • State Farm
  • CNA Financial
  • Nationwide
  • The Hartford
  • Allstate
  • Hiscox
  • Geico
  • Zurich Insurance Group
  • Auto-Owners Insurance
  • USAA
  • Erie Insurance
  • Farmers Insurance
  • American Family Insurance
  • AIG
  • Liberty Mutual
  • Next Insurance
  • Markel Corporationa

 

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