03rd June 2010
The Different Types of Liability Insurance
Amongst the great number of insurance policies that are found in the market today, Liability Insurance is one of the most popular because is it less expensive than the many others.
Amongst the great number of insurance
policies that are found in the market today, Liability Insurance is one of the
most popular because is it less expensive than the many others. The other types
of insurance policies that are freely found in the market today are far
expensive since they need to cover a number of areas. Let us take a common
example; a car insurance policy will need to pay for both your vehicle as well
as any other vehicle/vehicles involved in the collision, including damage of
any property as well as medical expenses caused from injuries to you or any
other party. Considering all the aspects in this example as well as in other
insurance policies, a Liability Insurance is much cheaper.
However, this type of insurance only covers
the losses of the other party. You, as the owner of the policy and your
property are unprotected. What is noteworthy with this insurance policy is that
it protects from you being held responsible for the other party’s damages.
There are different types in this category
of insurance policies such as:
Liability: This is very similar to a car insurance
policy but covers businesses. It protects a company from third party claims.
& O Liability: This stands for “directors and
officers” liability and it covers acts or omissions of those in the positions
of director or officer. An entire company is not responsible for the
statements, actions, failure to act, or other mistakes that are the
responsibility of the director or officer. This Liability Insurance covers
situations occurring in these areas.
Liability: This policy is also known as worker’s
compensation, and is a compulsory form of insurance coverage that all
businesses must carry. By the given name it sounds as though it is intended to
protect the employee – which it does to a certain degree, but it specifically
protects the employer in case of injury, job related illnesses or any other
damages on which the employee may sue the company.
Liability: This insurance policy is to protect
those recognised as “professionals” or “experts” in any given field who may not
be protected by a general liability do to their professionalism. When any
person is considered as a professional, he is held to a higher standard and is
therefore considered to hold greater liability towards his clients. Thus he
would need more coverage than what a general liability would offer.
Intentional damage and contractual
liabilities are generally not covered in these types of insurance policies.
Based on the brief explanations given above
on the different policies, we can summarise the meaning of Liability Insurance
in this manner:
It can be any type of insurance policy that
will protect an individual or business from a risk where they can be sued or
held legally liable for something such as malpractice, injury or negligence.
This insurance policy will cover both legal costs as well as any legal payouts
for which the insured would be responsible if found legally liable.
This is a simpler definition – an insurance
which protects a person or entity from claims initiated by another party.