Liability Insurance

Liability insurance refers to the insurance policy which helps in providing legal aid and financial aid to the person who got injured due to the insured person. This insurance policy covers the cost of the legal aid and the pay-out if the insured person is found liable for accidentally damaging or injuring someone.

How does Liability Insurance work?

Liability Insurance is also considered as a third party insurance service as this type of insurance is mostly purchased by lawyers, medical officers and other business owners whose services can cause damages to the final consumers or the third party. This policy helps in covering the medical bills and other injuries or damages cost to the final consumers. For example, if a faulty product causes damage to the house of the consumers, the liability insurance bought by the manufacturer helps in covering the cost of the damages and injury incurred. The terms and conditions of the policy do not include intentional damage done by the insured person; hence the cost will be taken care of by the person who causes it and not the insurer.

Types of Liability Insurance:

Since there are various types of professions and businesses, different types of liability insurance were introduced to provide aid in specific areas, some of them are as follows:

Employer’s liability and workers’ compensation:

This type of insurance helps in covering the injuries occurred to an employee while he or she was working and compensation is given to the family in case the employee passes away while working for the company.

Product liability insurance:

This type of insurance helps the manufacturing companies in paying compensation to the consumers who died or faced injuries due to faulty products of the organisation.

Director and officer liability coverage:

This type of insurance policy helps in covering the loss incurred when the company is being sued by another organisation or individual. This policy helps in providing coverage to the individual and helps in protecting the executive team of the organisation who are being sued.

Commercial liability insurance:

This is a general liability insurance policy where the company or the organisation is providing compensation to the employee or the consumer who suffered an injury due to the company’s product or property.

These types of liability insurance policy can help business owner sand organisations alike in providing compensation to the employees and the consumers who suffered an injury due to the products offered by the organisation. This method also helps the company from facing any financial harm and provides them with stable operations while the insurance company is handling the problem.