Liability Car Insurance

What Is Liability Insurance? How Does It Work?

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What Is Liability Insurance?

Liability insurance provides the insured party with protection against claims arising from injury or damage to persons and / or property.

This policy covers both legal costs and any payment which the insured would be responsible if found legally liable. Liability insurance however does not cover any intentional damage and contractual liabilities.


How Does Liability Insurance Work?

Liability insurance is essential for those who can be held liable for injuries to others, or if the insured causes damage to someone else’s property and is considered to be at fault. Liability insurance policies are taken out by anyone who has a business, drives a car, is practicing medicine or law— basically anyone who can be sued for causing damage and / or injuries.

A product manufacturer can purchase a product liability insurance to cover them if a product is defective and causes damage to buyers or any other third party. Business owners can purchase liability insurance to cover them if an employee is injured during business operations. Physicians and surgeons make decisions while at work also require insurance liability. And when it comes to auto insurance, 49 of the 50 states along with D.C. require all drivers to carry some sort of liability insurance coverage in case of accident and / or injury.


How Does Liability Insurance Work?

Liability insurance is essential for those who can be held liable for injuries to others, or if the insured causes damage to someone else’s property and is considered to be at fault. Liability insurance policies are taken out by anyone who has a business, drives a car, is practicing medicine or law— basically anyone who can be sued for causing damage and / or injuries.

A product manufacturer can purchase a product liability insurance to cover them if a product is defective and causes damage to buyers or any other third party. Business owners can purchase liability insurance to cover them if an employee is injured during business operations. Physicians and surgeons make decisions while at work also require insurance liability. And when it comes to auto insurance, 49 of the 50 states along with D.C. require all drivers to carry some sort of liability insurance coverage in case of accident and / or injury.


Types Of Liability Insurance

  • General liability: covers bodily injury and property damage to others caused by an accident.
  • Directors and officers: it protects individuals against financial loss and damage caused by “wrongful” acts committed, usually by mismanagement or decisions.
  • Professional Liability: Protects against any injury which another person receives because of your negligence in the way you provided a professional service, or lack of maintenance of professional standards.
  • Umbrella: Also called excess liability insurance coverage provides additional coverage for your home, auto and boat in the event of a claim costs being more than your homeowners, boat or car insurance can cover. So if you cause an extremely terrible accident and the resulting claim exceeds the limits of your car insurance, your umbrella will kick in to pay the rest of the bill.
  • Product liability: protects people from injuries caused by something you produce.
  • Liquor liability: It covers bodily damage to equipment or others specifically because it had a role in contributing to the intoxication of the other.

About The InsuranceXR

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  • We’re independent and have no stake in any insurance company you choose; Our intent is to simply offer you unbiased, quick & easier comparisons on your insurance options.

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