Liability Insurance

Liability insurance is a type of insurance that provides financial protection to the policyholder against claims resulting from injuries or damage to other people or property. It covers legal expenses and payments if the insured is found legally liable (liable).

 Liability Insurance

Key features of liability insurance:

1.Third-party coverage – protects against claims by others (not the policyholder).

2.Legal defense – covers attorney fees, court costs, and settlements.

3.Bodily injury and property damage – applies to injuries or damage caused by the insured.

4.No-fault protection – may cover certain claims even if the insured is not entirely at fault.

Common types of liability insurance:

1.General liability insurance

For businesses (covers slip-and-fall accidents, property damage, etc.).

2.Professional liability insurance (errors and omissions - E&O)

Protects professionals (doctors, lawyers, consultants) from negligence claims.

3.Product liability insurance

Cover manufacturers/sellers if a product causes harm.

4.Directors and officers (D&O) liability insurance

Protects company executives from lawsuits over management decisions.

5.Commercial auto liability insurance

Cover business vehicles for accidents that cause injury or damage.

6.Cyber ​​liability insurance

Protects against data breaches and cyber attacks.

7.Personal liability insurance (under homeowners/renters insurance)

Cover individuals for incidents such as dog bites or accidental injuries on their property.

Why is liability insurance important?

Legal requirement (for example, auto liability insurance is mandatory in most states).

Protects assets – protects personal/business finances from lawsuits.

Contractual liabilities – many clients or landlords require this.

Limitations:

Does not cover intentional damage or criminal acts.

Policy limitations apply (higher perils may require umbrella insurance for additional coverage).