Definition of Liability Insurance: The simplest definition of ‘liability insurance’ is the Insurance coverage to protect against claims alleging that one’s negligence or inappropriate action resulted in bodily injury or property damage.

People & organizations can and do mistakes for which they become liable if so when these acts ruled to function as cause for damaging the bodies or the properties of others. This is when insurance policies come to provide the protection. Liability coverage pays when the insured is legally responsible for the negligent act. In some situations, the coverage provides protection if the insured becomes ‘morally obligated’ to a celebration that is damaged by the non-negligent acts of the insured.

People/ organizations vary widely within their social and business conduct, and so does the coverage that is needed to protect them. For each group of people/ organizations you can find different coverages offering the protections. Different people/ organizations need different types/ levels of liability coverage.

Classification of Liability

Personal vs Commercial Liability: Personal liability insurance provides coverage for folks while commercial liability provides coverage for a business entity. A 4-door sedan car needs personal auto liability policy. If exactly the same vehicle can be used for delivery, then it could require a commercial auto policy.

Personal Liability Protection normally will come in personal policies such as Personal Auto Policies (PAPs), Homeowners Insurance Policies, boat policies, and Personal Umbrellas. These coverages purchase damages that the Insured causes to the bodily injuries, personal injury, property damages, legal defense in connection with claims brought contrary to the Insured.

Business/ Commercial Liability Protection: Involves cover businesses and/or individuals regarding the their business conducts.

Premises Liability applies when someone other than the insured or insured’s employees sues the business for damages because of an injury sustained in business premises. This means that the injured party must first suffer a personal injury on your premises, and must claim for the damages they suffered.

Product Liability includes liability protection for business completed products or services. Similar coverage is provided beneath the term ‘completed operations’ such as for example operations of several contractors in the event that they cause damages to others in the course of their service rendering. Click for info as physicians, lawyers, real estate brokers, and insurance agents have special professional liability coverages.

Professional Liability. Provides protection for most classes of people and businesses for just about any bodily injury damages their service/ advice may cause to others. For example malpractice insurance for doctors and medical staff, errors & omissions for insurance & real estate agents, etc.

Employer’s Liability provides coverage for employees throughout their employment. The employer must be responsible or negligent for the coverage to kick in. In the case of Workers Compensation, fault and negligence don’t need to be proved for employee to collect for just about any work related injury.

Director’s and Officers insurance provides protection against any lawsuits contrary to the officers of the business enterprise by its owners. Garage Liability applies in situations where a business deals with vehicles owned by others. The coverage provides protection from the risks of being sued due to using vehicles owned by the business and vehicles that are owned by others (clients.) In the event that a business/ individual works with or takes possession of other’s vehicles, a special coverage called “Garage Keeper Liability” is needed. Garage Keeper Liability provides comprehensive and collision coverage on vehicles NOT owned by the business enterprise while the vehicles now take over the business enterprise. Auto service stations, valet parking businesses, towing services, and car washes are types of businesses that need garage liability and garage keeper liability protection. Garage keeper liability could be written on Direct Basis or Excess. In the even of Direct Basis, the policy can pay for damages of vehicles of the customers of the Insured irrespective of who is at fault. In the case of Excess, the policy will pay for damages of vehicles of the clients of the Insured only if the Insured is negligent.

Liquor Liability provides protection for establishments that sell liquor (Packaged liquor, taverns, manufacturers of liquor) against loss or damages claimed as a result of a patron of the business enterprise becoming intoxicated and injuring themselves or others.

Inland Marine/ Cargo Liability provides protection for business involved with hauling merchandise and properties of others. It will pay for damages of the properties hauled in case the Insured is likely for the damages.

Time Factors of Liability Insurance Polices

Some commercial liability plans are written on Claim Made Basis. Because of this the policy in effect at the time a claim against the insured will pay for losses, irrespective of when they occurred before. Most professional liability policies are written on Claim Made basis. Most commercial liability policies are written on Occurrence Basis, where even though the policy may have expired, provided the policy was in effect at that time that the bodily injury or property damage occurred, a claim can be made against it.

Liability Limits

CSL or Combined Single Limit policies allow insurance companies to mix both bodily injury liability and property damage liability insurance under an individual limit. The insurance company would pay up to the stated limit on a third party claim whether or not the claim was for bodily or property damage. In Split Limit policies, the policy would breakdown limits to, for instance, bodily injury limit per person and bodily injury limit per accident and property damage per accident.

Example, an auto policy with CSL $300,000 can pay up to that limit for just about any and all claims if they are bodily injury for just one person, lots of people, or property damage that has been due to the Insured. If the policy limits come separated (100/300/50) it means that the insurer will pay the utmost of $100,000 for bodily injury of 1 1 person, $300,000 for bodily injuries of most other folks hurt, and no more than %50,000 for property damage due to the insured negligent act.