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Liability Insurance FAQ
     Get Straight Facts

What Does Liability Insurance Protect You Against?


Generally speaking, liability insurance protects you against great loss relating to various issues and circumstances. This includes both the known as well as the unforeseen situations. And that is if the policy holder has been found responsible for the latter. This is a special kind of insurance coverage that is available for both companies as well as individuals who are seeking protection for their assets which can include properties, status, as well as well being. It is specifically designed in order to offer protection in various forms to the policy holder.


Types of liability insurance


While it is true that the kind of coverage will be similar for the individual as well as the business liability insurance, the difference lies in the maximum points for which liability insurance protects you against. There are different types of liability insurance available in the market today. The most common type is the general liability insurance that can be availed by both individuals as well as businesses. So for you to make the right call on this, you must make sure that you sort this out with your insurance agent.


Liability insurance


Liability insurance protects you against various forms and scope of circumstances depending on the policy that you got. But if you want the best and most comprehensive protection possible, you can go for the umbrella insurance policies. These give you protection against claims and circumstances which are beyond the maximum points set for most of the policies for general liability insurance. More than that, these umbrella policies can also give you and your assets protection even in extreme situations. Given that, this type of coverage is definitely of great help for businesses which have a lot at stake. An example of this would be big companies who have been in operation for a long time.


Who needs liability insurance?


The major aspect that liability insurance protects you against is great losses through third party claims and costs. Given that, it is not surprising that this is actually one of the most popular and in demands types of insurance coverage today. This is especially true for companies and corporate accounts. From business executives who own and/or operate small businesses to those who have a medium scale enterprise or even a large corporation, all of them have realized the value of investing in liability insurance.


Coverage of liability insurance


  • Third party losses

There are generally three categories of issues and circumstances for which liability insurance protects you against. One of these is third party losses. These losses can include damage to property, physical injury or any other type of situation which was brought forth by the advertising made or activity done by your company. A resulting situation due to the day to day operations of your business is also included here. You must keep in mind, however, that there is nothing that can stand in the way of a customer from issuing a legal claim against a third party loss. Hence, you should be meticulous about this coverage in your liability insurance policy.

  • Legal Liability

This essentially means that liability insurance protects you against losing all of your assets, especially in tough financial situations. Say for instance, in business. Liability insurance will protect your personal finances as well as assets in the event that a third party files a lawsuit against you. However, you must take note that the coverage will not give you protection from any lawsuit as a policy holder. A third party claimant will have no access to your personal bank accounts, assets and finances to pay for the damages or any other form of remedy that may be sought. 

  • Intangible issues

Last but not the least, liability insurance protects you against intangible issues. This includes the likes of slander, libel and privacy violations among others. So say for example, you are a business owner, this type of insurance will give you protection against personal damages when a third party sues the company for libel and slander. But what you must remember here is that not all types of liability insurance give this type of coverage. So it is best to ask your agent as to what policy or type of liability insurance protects you against these circumstances.