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:

General

Liability: This is very similar to a car insurance

policy but covers businesses. It protects a company from third party claims.

D

& 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.

Employer

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.

Professional

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.

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