What is Liability Insurance?
Liability Insurance essentially works on protecting the Policyholder from liabilities that result from legal cases and claims. If the legal proceeding is taken against either the Policyholder or the Policyholder’s business, a Liability Insurance protects the Insured from paying large amounts of money by paying the amount to the entity that has taken legal action against the Policyholder.
Since the Insurance Company is paying the amount to the entity demanding money from the Policyholder through legal action, instead of paying the Policyholder themselves, this form of Insurance is also called the Third-party Insurance. In Liability Insurance policies, the Insurance Company is obliged to pay for the legal expenses of the case when it goes to court, which is why the legal cost of the case sometimes affects the Insurance Policy and the amount of premium being charged since the cost of defense cases in court can be high.
Types of Liability Insurance
There are many different types of Liability Insurance. Some of these types include
- Commercial General liability
- Commercial Crime Liability Insurance
- Professional Indemnity Insurance
- Director’s and officers liability coverage
1. Commercial General Liability Insurance
The Commercial General Liability Insurance, also known as CGL for short, covers the losses of legal claims made by customers who have suffered some kind of personal injury or harm on either the premises of the business or from the products that the business offers. In addition to this, it also covers losses of legal claims made by customers who have suffered losses due to any form of advertisements put forward by the business itself.
- Employer’s liability and compensation for workers: Liability insurance is mandatory to cover the liability damages arising from injuries or the death of employees.
- Product liability insurance: this kind of liability insurance is best suitable for the companies that sell their products in the general population. It protects the business from lawsuits and other legal damages in case of any death or injury caused by their products.
2. Commercial Crime Liability Insurance
This type of Liability Insurance policy protects your business from losses incurred due to things like Theft, Robbery, and Deceitful Employees. Also, it also protects your business from losses incurred to technological fraud (i.e., computer fraud and hacking, etc. The policy simply leads to the insurance company reimbursing you by the amount of loss you have incurred and the limits of your insurance policy.
3. Professional Indemnity Insurance
Certain businesses are based on providing professional or legal advice to their customers. It is possible for these businesses to get sued by the customers due to some professional advice that did not work out well for the customer. Professional Indemnity Insurance is a type of Liability Insurance that protects these types of businesses or individuals from the financial stress of the legal action taken against them by potentially dissatisfied customers.
- Indemnity insurance: it provides coverage to protect a business from dissatisfied customers’ claims because of companies’ negligence against financial harm of the customer.
4. Director and officer liability coverage
Whereas the company provides protection to its employees, it also covers the executive team of a company. If the company is sued because of any reason then this type of insurance provides protection to its executive team.
5. Cyber liability coverage
Some companies hold the personal information of the customers, i.e., name, number, address or other. This type of liability insurance helps the company to cover if the data is hiked or misused by any technical error at the wrong place.
What are the benefits of getting Liability Insurance?
- Financial protection: the financial protection it offers you is incredible. In professional life or business, there is always a chance of getting sued. Liability Insurance protects from the hassle of having to pay for the legal case that will follow.
- Save for the bad time: Liability Insurance will also pay the entity that has pursued legal action against you in case you lose the case, and you have to pay. This is a relief since you won’t have to pay a large sum out of your pocket at once.
- Efficiency of business and lower premium costs: Another advantage is that you can potentially lower the cost of the premium by reducing the number of risks in your workplace and your business. This will, in turn, increase the overall efficiency of your business.
- Protection against actions of employees and staff members: it protects the company from staff or employees’ actions which may harm the business. These actions may include serious injuries or minor breakages. And the claim is brought by the third-party, in this scenario coverage is brought by general liability policy insurance.
- Protection against data breach: liability insurance provides coverage to the company if the personal data of customers is breached or stole because of hicking or any other cybercrime.
- Protection against the unexpected: when there are humans working or involved in a task, instead of high-security control, there is a chance of accidents. So if a company has liability insurance it gives protection against unexpected happenings.
In what ways do Liability Insurance Companies help the Insured?
Liability Insurance Companies protect policyholders by upholding certain responsibilities. These responsibilities include defending the customer and their business from losses incurred during legal procedures in court. In addition to this, another responsibility of the insurance company is to indemnify. This means that the insurer will pay the entity or the individual that has demanded reimbursement from the Policyholder’s organization. However, the insurance company will only pay the amount that has been pre-decided according to the limits of the insurance policy.
Prominent Companies that offer Liability Insurance
Many excellent companies offer Liability Insurance. Some of these companies include
Liberty Mutual is one of the most prominent companies when it comes to good, comprehensive liability insurance plans. They provide a wide range of discounts and have premiums that can be adjusted according to the wishes and financial capabilities of the client. In addition to this, Liberty Mutual also has adequate policy rates and offers a variety of different types of insurances. These include liability insurance policies, auto insurance policies, and credit insurance policies.
Nation Wide is another prominent company when it comes to the provision of good quality Liability Insurance. They have an online website, which makes contacting them extremely easy and efficient.
Also, they also offer a wide range of Insurance policies with flexible premium rates that can protect your business from the financial stress of paying a large amount of money to dissatisfied customers. Thus, Liability insurance is generally a great choice for your business since it helps your business flourish and also protects it.