The liability insurance provides the protection to the insured person, in case if that person has damage some other person’s insured property like car or house or any other insured thing. The liability insurance is helpful in case of claim made on the person by the other insurance company. The liability insurance not only bears the legal cost but also paid the claims to the insurance company whose protected property has been damaged by him. It is pertinent to mention that any damage that is made intentionally will not be covered under liability insurance policy.
Explanation of Liability Insurance
To get the better idea of liability insurance let’s take the help of an example. Suppose Mr. M is the owner of the luxurious car. Mr. M insured the car with the ABC Car insurance company. Another person Mr. P who is fond of driving. Mr. P has purchase the liability insurance from XYZ Insurance Company. One day, on a pleasant weather, Mr M was enjoying driving with his family on his luxurious car. Mr. P was also driving another old model car on the same road. Suddenly Mr. P hits the Mr. M’s car from back. Mr. M’s car smashed from the back. Although no person injury occurred so, M. M called his insurance agent and told about he accident. Mr. P also called his liability insurance agent. The claim adjusters of both insurance companies arrived on the spot. Let s cut the story, after filling the claim Mr. M got his car repaired by the ABC car insurance company. Now ABC insurance company file the clam case on Mr P. The court heard the case and decide in favor of insurance company that Mr. P has the liability to pay the amount of car repairs to ABC insurance company. As we know that Mr P has the liability insurance policy. So, Mr. P call his insurance agent and file the claim. The claim accepted and the XYZ insurance company pay the damages to ABC insurance company on behave of its client Mr. P and also pay the law suit fees to Mr. P’s lawyer as well.
With this detailed example I hope that you understand the concept of liability insurance. Keep in mind that this insurance policy is not for those people who damages other people’ property intentionally and hope that their insurance company will pay for them. As before paying the liabilities, the claim adjuster go through complete case and make sure that any damage made by insured person is accidentally ad not intentionally.
Who needs Liability Insurance Policy?
Any person who is doing any business, drivers or owner of any property or valuable objects or things must have to purchase the liability insurance policy for their protection from liabilities on them of other people. Insurance companies are providing different kinds of liability insurance now a days, we are going to go through the famous types of liability insurance to give you complete and clear picture of this insurance policy.
- Liability for Employees
- Product Liability Insurance
- Security Insurance
- Umbrella Liability Policy
- Director and Officer Liability Coverage
- Commercial Liability Insurance
- Comprehensive General Liability (CGL) Policy
Why it is important to buy Personal Liability Insurance
There are many benefits of personal liability insurance, especially for those people who got sued more often than other peoples. As this policy will save from any possible penalty or damage claims on account of liabilities. The liability insurance policy holder will not have to pay any kind of lose like any damage to house, car accidents, boat damage, etc. as his insurer will pay on his behalf.