The Different Types of Liability Insurance

Amongst the great number of insurance policies that are found in the market today, Liability Insurance is one of the most popular because is it less expensive than the many others. The other types of insurance policies that are freely found in the market today are far expensive since they need to cover a number of areas. Let us take a common example; a car insurance policy will need to pay for both your vehicle as well as any other vehicle/vehicles involved in the collision, including damage of any property as well as medical expenses caused from injuries to you or any other party. Considering all the aspects in this example as well as in other insurance policies, a Liability Insurance is much cheaper.

However, this type of insurance only covers the losses of the other party. You, as the owner of the policy and your property are unprotected. What is noteworthy with this insurance policy is that it protects from you being held responsible for the other party's damages.

There are different types in this category of insurance policies such as:

General Liability: This is very similar to a car insurance policy but covers businesses. It protects a company from third party claims.

D & O Liability: This stands for "directors and officers" liability and it covers acts or omissions of those in the positions of director or officer. An entire company is not responsible for the statements, actions, failure to act, or other mistakes that are the responsibility of the director or officer. This Liability Insurance covers situations occurring in these areas.

Employer Liability: This policy is also known as worker's compensation, and is a compulsory form of insurance coverage that all businesses must carry. By the given name it sounds as though it is intended to protect the employee - which it does to a certain degree, but it specifically protects the employer in case of injury, job related illnesses or any other damages on which the employee may sue the company.

Professional Liability: This insurance policy is to protect those recognised as "professionals" or "experts" in any given field who may not be protected by a general liability do to their professionalism. When any person is considered as a professional, he is held to a higher standard and is therefore considered to hold greater liability towards his clients. Thus he would need more coverage than what a general liability would offer. Intentional damage and contractual liabilities are generally not covered in these types of insurance policies.

Based on the brief explanations given above on the different policies, we can summarise the meaning of Liability Insurance in this manner:

It can be any type of insurance policy that will protect an individual or business from a risk where they can be sued or held legally liable for something such as malpractice, injury or negligence. This insurance policy will cover both legal costs as well as any legal payouts for which the insured would be responsible if found legally liable.

This is a simpler definition - an insurance which protects a person or entity from claims initiated by another party.