Liability insurance is a type of insurance that provides financial protection against legal claims made against the policyholder. It is designed to cover the costs of lawsuits, settlements, and judgments that may arise from a wide range of incidents, including property damage, personal injury, and wrongful death.
There are several types of liability insurance available, each with its own unique coverage and features. Some common types of liability insurance include:
- General liability insurance: This type of insurance is designed to protect businesses from a wide range of liability claims, including bodily injury and property damage. It can also provide coverage for advertising injuries and personal injuries, such as defamation and invasion of privacy.
- Professional liability insurance: also known as errors and omissions insurance, This type of insurance is designed to protect professionals, such as doctors, lawyers, and accountants, from claims of negligence or malpractice.
- Product liability insurance: This type of insurance provides protection for manufacturers, distributors, and retailers against claims of injury or damage caused by a defective product.
- Auto liability insurance: This type of insurance is required by law in most states and provides protection against claims of injury or damage caused by an auto accident.
- Umbrella liability insurance: This type of insurance provides additional liability coverage above and beyond the limits of other liability policies, such as auto or homeowners insurance.
When a claim is made against a policyholder, the liability insurance will cover the costs of legal defense and any settlements or judgments that may be awarded. This can include the cost of attorney’s fees, court costs, and any damages that may be awarded to the plaintiff.
In summary, liability insurance is a type of insurance that provides financial protection against legal claims made against the policyholder. It is designed to cover the costs of lawsuits, settlements, and judgments that may arise from a wide range of incidents, including property damage, personal injury, and wrongful death. Different types of liability insurance are available to cover different types of risk, and a combination of policies may be needed to provide adequate coverage.
