Liability insurance is an insurance product that provides protection against claims resulting from injuries and damage to other people or property. Liability insurance policies cover legal expenses and payments for which an insured party is responsible if declared legally responsible. Intentional damages and contractual liabilities are generally not covered by liability insurance policies. Unlike other types of insurance, liability insurance policies pay third parties and not the insured.
Corporate liability insurance, on the other hand, protects the financial interests of companies and business owners against lawsuits or damages resulting from similar accidents, but it also extends to product defects, recalls, etc. Personal liability insurance covers individuals against claims resulting from injuries or damage to other people or property suffered on the insured's property or as a result of the insured's actions. Instead of a general contractor being forced to rely on each party's general liability coverage, the project owner can purchase resumable liability insurance that covers all the contractors working on the project. This means that it's not a question of whether or not you need liability insurance, but what types fit the needs of your company.
Policies protect both the insured and third parties who may be injured as a result of the policyholder's involuntary negligence. The manufacturer of a product can take out product liability insurance to cover it if a product is defective and causes harm to buyers or third parties. The cost of an additional insurance policy isn't appealing to everyone, although most companies offer reduced rates for bundled coverage packages. Liability insurance does not cover intentional or criminal acts, even if the insured is declared legally responsible.
While commercial general liability insurance protects against most legal problems, it does not protect directors and officers from being sued, nor does it protect the insured against errors or omissions. Business owners can purchase liability insurance that covers them in the event that an employee is injured during business operations. Every business owner should have an asset protection plan that is based on available liability insurance coverage. To protect your company against the threat of claims and lawsuits, it is essential to have liability insurance that fits the needs of your company.
