A whole fresh problem has started here, and if not followed carefully, can lead to a huge case in court.
And as we all know, cases like this include the compensation of the person whose car was hit.
Now, what if you are the one that hit someone like this. What will you do?
Oh, yes, you'll settle out of court of course.
But what if you don't have enough funds to do so? Or let's say you have enough, but, compensating someone for the bashing of their car will surely make you spend some huge cash that should've gone somewhere else in the realization of your dreams.
So what step can you take now to ensure that you block this future loophole?
Get a liability insurance policy!
And in order to get a policy suitable for you or whoever you intend to purchase it for, you deserve a free tank of knowledge.
For this reason, you should have fun reading through, because I specifically wrote this article for your utmost benefit.
In this writeup, you'll have access to different topics under liability insurance, like;
• What is Liability Insurance?
• Types Of Liability Insurance
• Key Things To Note About Liability Insurance
• How Liability Insurance Works
Let's get right into it.
WHAT IS LIABILITY INSURANCE?
Liability insurance as a term, refers to a type of insurance that provides protection for an insured individual against legal claims which came up due to the damage or injury to other people or other people's property.
The liability insurance also provides coverage for legal costs and payouts if the insured is responsible for it and if they(the insured) are found legally liable.
In general, there is no coverage provided for intentional damage and contractual liabilities.
TYPES OF LIABILITY INSURANCE
There are a range of liabilities to which business owners are exposed to, in their various fields of business, and these liabilities can put their assets in substantial claims, which is a big risk to the business as a whole.
For this reason, all business owners have a need for an asset protection plan, which is built around available liability insurance coverage.
The major types of liability insurance include;
• Product liability insurance
• Director and officer liability coverage
• Employer's liability and workers' compensation
• Indemnity insurance
• Umbrella liability
• Commercial liability insurance
Let's discuss briefly about each type.
Product Liability Insurance
This type of liability insurance policy is designed for businesses that deal in the manufacturing of products for sale in the general market.
The policy provides protection against impromptu lawsuits arising from death or injury caused by the manufactured products.
Director And Officer Liability Coverage
This type of liability insurance policy provides coverage for a company's officers, staff or board of directors against liability in the case of a legal claim being filed against the company.
Employer's Liability And Workers' Compensation
This type of liability insurance policy is mandatory for employers. It provides protection against liability for the business should any injury or death of employee occur.
Indemnity Insurance
This type of liability insurance policy protects a business against negligence claims that happened because of a financial harm due to mistakes or failure to perform.
Umbrella Liability
This type of policy is typically a personal liability policy which is made to protect against losses that are catastrophic.
In general, coverage gets started when the liability limits of other insurance policies are reached.
Commercial Liability Insurance
This type of liability insurance policy is a standard commercial general liability policy also known as comprehensive general liability insurance.
The policy provides protection by the provision of coverage for lawsuits which arise from injury to the public or to employees, property damage caused by an employee, and injuries caused because of the negligent action of the employees as well.
The policy is also capable of providing coverage for intellectual property infringement, libel, slander, tenant liability, employment practices liability and contractual liability.
The policy is also designed so that it can be purchased by either large or small businesses, joint venture businesses, a corporation, partnership, association, or an organization. Interestingly, it can be purchased by even a newly acquired or a newly started business.
The coverage that this policy provides include coverage for damages made to property, bodily injury, medical bills payment, personal and advertising injury, and premises and operations liability.
The liability insurance companies provide coverage for general and compensatory damages which is for lawsuits, but not punitive damages.
KEY THINGS TO NOTE ABOUT LIABILITY INSURANCE
There are a few important things about liability insurance that it is wise to know.
These key things include;
• Liability insurance entails the provision of protection against claims which resulted from the damages and injury to people and/or people's property.
• The liability insurance policy provides coverage for legal costs and payouts, which the insured party would be liable for.
• Intentional damage, criminal prosecution and contractual liabilities are some of the liabilities that are not covered.
• The insurance policy is most of the time required for product manufacturers, automotive insurance policies and any person who practices law or medicine.
HOW LIABILITY INSURANCE WORKS
For those who are at fault for injuries sustained by other people, or are responsible for the damage of other people's property and are liable, liability insurance is critical.
Due to this, the liability insurance policy is also termed third-party insurance.
It is important to note also that the policy does not cover criminal or intentional activities even if the responsibility of the insured is proven legally.
The policy is possible to be taken by typically any individual that can be sued for damages.
Policies provide protection for both the insured and also third parties who may, as a result of the policyholder's unintentional negligence or carelessness, get injured.
Most states require that automobile owners get liability insurance to be under their automotive insurance policies, for it to be able to cover injury to other people and damage to other people's property too, in the case of unintentional accidents.
