Sunday, April 19, 2009

What is Liability Insurance?

Liability Insurance Protects You Against

What is Liability Insurance?

There are many different types of insurance policies available, but liability insurance is one of the most popular because it costs much less than many other options. For example, in regard to auto insurance policies, liability insurance costs far less than full coverage. The reason for this is because full coverage insurance must pay for both your vehicle and any other vehicle involved in a collision, as well as property damage and medical expenses due to injuries to you or another party.

On the other hand, liability insurance is only responsible for the other party's losses. Your person and your property are unprotected, but liability insurance protects you from being held responsible for the other party's damages.

There are different types of liability insurance, including general liability, which works in much the same way as auto liability insurance, but covers businesses. General liability protects a company from third party claims. Aside from general liability, there is also D & O liability, employer liability, and professional liability insurance.

D & O liability stands for "directors and officers" liability and is intended to cover the acts or omissions of those in the director or officer position. An entire company should not be held liable for the statements, actions, failure to act, or other mistakes that are the responsibility of an officer or director.

Employer liability is also known as worker's comp, and it is a mandatory form of liability insurance coverage that all businesses must carry. While it sounds like it is intended to protect the employee, which it does to some degree, it is actually protection for the employer in case of injury, job related illness, or other damages for which the employee might sue the company.

Professional liability is similar to malpractice insurance, although the coverage may not be as comprehensive as some malpractice policies in different fields. The purpose for professional liability insurance is to protect those seen as professionals or "experts" in a given field, who may not be protected by general liability due to their expertise. When one is seen as a professional, he is held to a higher standard and is therefore often considered to hold greater liability towards his clients. Consequently, he needs more coverage than general liability insurance offers.

The simplest definition of liability insurance is insurance which protects a person or entity from claims initiated by another party.

New: Discuss this Article

Posted by: anon23594
Mrs. M was shopping in the X Department store, and a salesgirl accidentally stepped upon her foot, breaking the skin. The customer did not believe the accident to be serious and shortly after left for a vacation. Before her return, blood poisoning developed. The woman brought suit, and her attorney contended the store to be liable on the ground of negligence. What is your opinion?

Posted by: anon9646
Legally, if you run into the back of the car in front of you, even if they stopped unexpectedly, you are still at fault, for failing to follow at safe distance. This I know for I was charged with the same, when the car in front of me came to a dead halt on the interstate, for no discernible reason. I ran into the back of that car, and the cop was ever so nice, but said he would have to charge me!

Posted by: anon5396
I want personal liability insurance that covers me. Not my vehicle. I want it to protect me from liability no matter what I am driving. I have 12 motor scooters, all antiques. Several of them get ridden two or three time a year. None of them are ridden more that 50 miles in a year, and only one even comes close to that. This is a collection, not a fleet. I have never had a scooter accident, but stranger things have happened. Obviously, I can't buy a policy for each of these scooters. I don't need collision insurance, just liability on myself.

Posted by: anon3574

I was in a car accident recently where a drunk man ran onto the road, the car in front of me stopped abruptly and then I ran into the back of that car, having braked, but not fast enough.

Do I still have to pay the cost of damage to the other car? I genuinely believe that the car accident is not my fault.

Please help, I can't afford this right now!!!