Liability insurance is insurance that covers the costs that arise from legal proceedings or claims. It includes lawsuits, accidents, and other situations where a person can be the liability target. If someone claimed you, your liability insurance would cover any award. The coverage varies depending on what type of claim is made against you and how much is owed if you are found liable.
What does liability insurance cover?
1. Personal injury
You may be named in a lawsuit, or a claim may be made against you. If you win or the case is dismissed, your insurer will pay the whole cost of damages to whoever was injured. The same goes if you have to pay damages yourself, and your insurer pays it when there are no legal proceedings against you.
2. Property damage
This type of cover means that as long as there was no physical injury, your insurer will cover up to $1 million in damages from any accident which caused property-related damages. It covers car accidents, slip and fall cases, or incidents where the damaged items were connected to your workplace.
3. Malicious prosecution
This insurance covers you if someone intentionally brings about a lawsuit against you for an action that was not your fault. It is to cover the costs of any attorney fees or court costs from the case and will reimburse you for whatever amount was awarded to the claimant.
The different types of liability cover
A few different types relate to what happened before, during, and after the incident when it comes to liability insurance.
1. Employer’s liability insurance
If your business is small or very large, this insurance covers you and your employees if they are at fault while working. It may include accidents, slip-and-fall claims, or any other incidents at work.
2. Product liability insurance
This type of policy will cover any claims made against you by the purchaser of your product if they suffer physical injury or property damage. It will also cover any lawsuits against you if the customer claims your product was faulty or mislabelled.
3. Commercial liability insurance
These policies cover any claims made against you for damage to your company or organization. These policies will cover whatever damages or expenses are caused, up to the limits of the policy. It is important to understand that, in most cases, the policy will pay out the full amount of damage owed to the plaintiff, making this type of insurance very affordable.
4. Corporate liability insurance
This type of coverage is for situations where a claim might have been made against you by your employees or other people working in your company, as well as third-party claims between each other. It also covers any lawsuits brought against you if you are traded around or sold and helps cover damages and defense costs in court.
5. General liability insurance
It is a policy that will cover you against any personal injury, property damage, or malicious prosecution that could be brought against you, whether it’s by someone who buys your product or not. It will cover anything from a small car accident to a much larger lawsuit bought against you in court.
How to get liability insurance
1. Directly through an insurer
It means that you buy insurance directly from the company that provides it, and the insurer will then provide you with the coverage of it. It is usually more expensive as an individual policy than a group policy or event.
2. Group policy
This type of insurance is usually cheaper because you are insured as part of a group. It can be offered by your employer or other company groups such as unions, corporations, and even associations. It is a good way to protect everyone in the office or department if something happens, but it does not cover third-party claims against any member individually.
3. Event policy
This type of insurance is similar to group insurance, except that it is only for a certain period and only covers part of the company or organization. It can be for Christmas parties, charitable events, or any highly-populated get-togethers and will usually cover property damage, injury, or malicious prosecution from that event.
4. Agreed value policy
This type of policy means that you suffered property damage, and your insurer will pay the full amount to replace whatever property was damaged or destroyed. It can be any amount up to the actual value of that item.
How It Works Liability insurance
Liability insurance is a very easy way to protect yourself against costly court costs, settlements, and even legal fees in some cases. It is much easier to pay out of pocket if you are found not guilty rather than to fight it out in court and have your insurer pay the full amount if you lose. It is much cheaper than going through all those legal processes, making it easy for you and the insurance company. Liability insurance is also a good way to protect yourself from lawsuits. If someone sues you because of an incident on your property or at work, this will cover the cost of any damages you may suffer.
Liability insurance has different policies for different situations, making them easy to use. You can find group policies if you are part of a team or organization or individual policies if you prefer that type instead. The event coverage is for any scheduled event worth protecting and will help protect yourself from anything that happens at the event. The personal liability policy will cover you for anything from a car accident to a slip-and-fall claim at your workplace or if anyone is visiting or working on your property. Product liability insurance is cheaper if you are in the industry of manufacturing or selling products, as it helps cover any lawsuits brought against you for not only harming someone but also for not following industry standards and consumer regulations. General liability insurance is also very useful, particularly if you tend to have many employees and clients visiting your place of business. There are so many different types of policies available that it can be hard to choose which one to use when there are so many available options.