Liabilities Insurance is one of the most important types of personal insurance. If you’re wondering what it is or why you need it, we’ll get to that in a minute. First, we’ll start by explaining what liability means and why it’s important to have insurance against potential losses from lawsuits. Then we’ll discuss some of the different kinds of liabilities that can lead to an expensive lawsuit—and how they differ from each other. We’ll end with some tips for finding Public Liability Insurance coverage at a fair price, including how to collect evidence if someone does sue you.
What Does Liabilities Insurance Cover?
Liability insurance protects you from legal liability. If you are sued for personal injury or property damage, your policy covers the defence costs and any damages awarded against you.
As a homeowner or renter, you may also have a separate policy to insure personal property against theft and vandalism. This can be purchased as part of umbrella coverage that also includes automobile insurance.
What Kinds of Liability Insurance Are There?
There are two main types of liability insurance:
- General Liability: This type covers you for injuries or property damage caused by your business or operations. It’s a broad coverage that protects you from a wide range of situations and can include coverage for defective products, medical payments, personal injury protection and more.
- Product Liability: This type covers claims made against you as the result of an injury caused by one of your products or services, including food-related businesses.
When Should You Buy Liability Insurance?
If you own a home, a business or have a car or boat and are insured for them, then it’s likely that you also have insurance. If not, you should consider obtaining it. Liability insurance covers injuries that happen to others because of your negligence (or carelessness) in relation to the property in question:
- Homeowners Insurance
- Business Owner’s Policy (A business owner should be able to get coverage at an affordable rate by adding to their existing homeowner’s policy.)
- Renters Insurance (Renters can buy this type of policy through their landlord and/or through some apartment complexes.)
Who Has to Have Liability Insurance?
You. Yes, you. If you have assets (a home, a car, savings), a business or professional practice and/or property that could cause damage to others if it were damaged, then you need liability insurance.
That means if your cat gets out and scratches someone’s leg or your dog bites a child—or worse—and causes significant harm (the cost of medical care), then the victim can sue you for damages. That includes:
- Medical expenses related to any injuries caused by the animal, such as emergency room visits, surgeries and so on;
- Loss of income while they recover from their injury;
- Pain and suffering on top of the lost income;
- Disability payments in case they can no longer work due to their injuries;
We hope this post has helped you understand the basics of liability insurance. Liability is an important type of coverage that’s a smart addition to any family home or business, but it can be difficult to know where and when to buy it. Don’t forget that with our free quotes, you can compare prices from top insurers before buying a policy.