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Liability insurance helps individuals and companies

There are many types of liability policies to protect individuals as well as businesses and other organizations against the possibility of causing damage to other people’s property, bodily injury, or death. And such plans essentially fall into two general types: personal and business.

Common types of personal liability coverages include home and vehicle. When home and property owners purchase the policies, they have some measure of protection against potential lawsuits arising from damage, injury, or death due to the use of the insured homes, other structures, and parcels. Most homeowners insurance plans come with some measure of such protection against lawsuits, but an umbrella policy will provide an even higher level of coverage at relatively affordable rates.

When it comes to vehicles, liability plans are required by law in all states to legally drive on public roads. These policies are divided into three segments. The former pays for the cost of medical treatment for a person’s bodily injury and typically ranges from a mandatory minimum amount of between $10,000 and $50,000, depending on the law of the state in which the vehicle is licensed. The next segment pays for medical costs to treat bodily injuries to more than one person and is generally twice the amount claimed for injuries to one person resulting from the use of the insured vehicle.

The final part of vehicle liability pays for damage to other people’s vehicles or property, such as when you are involved in a collision or a vehicle rollover that causes the driver to lose control and possibly damage a structure or other item. Such coverage could be as low as $5,000, depending on some state laws. But that can leave a car owner vulnerable to a lawsuit if damages exceed that amount. In which case, a general plan could make up the difference.

For commercial businesses, liability protection is a great necessity and is purchased by all sensible business owners. Such policies can range from workers’ compensation insurance, which is required by law in all states except Texas, where employers can opt out of such plans. Workers’ compensation pays for the costs of medical treatment as well as the wages of employees injured while on the job in exchange for not participating in costly legal battles that could deadlock the courts and leave one party suffering a potentially serious loss.

Other types of commercial liability protect those who do business with the insured and may include coverage for damage, injury or death arising from the use of a product sold or services rendered. Other types may insure against injuries that occur on covered property or may protect assets that are cared for by a business on a fiduciary basis.

Regardless of the type of coverage a person or business may need, having at least some measure of protection is a smart move and, in many cases, is legally mandated by state law.

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