Liability Insurance

By: Steve Valentino

Of the myriad types of insurance policies available, liability insurance is right up there in popularity, primarily because it is less expensive than other insurance. For instance, when it comes to auto insurance policies, liability insurance costs are distinctly less than full coverage. Full coverage insurance covers for both vehicles involved in the collision, in addition to the medical expenses and property damage due to injuries to you or another party. Liability insurance, on the other hand, is accountable for only the other party's damages. Though you and your property are not protected under the coverage, liability insurance guards you from being responsible for other people's losses.

There are various types of liability insurance, including general liability that works in the same way as auto liability insurance, but deals with businesses. General liability covers clients from third-party claims. Liability insurance is intended to offer protection against claims by the third party, i.e., payment is not given to the one insured, but to the person suffering the loss and who is not a party to the insurance. Usually, liability insurance policies do not cover contractual liability or damages that are caused deliberately. When a claim for damages is put forward, the insurance carrier can exercise its right to defend its client. Policy limits do not affect the legal costs.

In a number of countries, liability insurance is a must for those whose mode of employment puts others at risk. These people include vehicle drivers, job employers, and others who manufacture products that could be harmful for a person's health. Such individuals, public policies demand, must have insurance, so that in the event they should cause loss to another individual, compensation is available.

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