Liability Insurance

Insurance offers protection to the insured against any loss incurred due to any accident or mishap. In normal Insurance there are mainly two parties involved; Insurer and Insured. Insurer is the party who provides the coverage against any loss and Insured is the party who pays the premium for getting coverage.

In Liability Insurance the protection is offered to the third party rather than the insured himself. In other words under this Insurance the payment is made to the third party, who has suffered loss due to unintentional negligence of the Insured. In Liability Insurance the amount is paid to someone who has suffered loss but is not a party to the Insurance contract. The point to be noted is that intentional damage or contractual liability is not covered in this Insurance policy. Under this case if a claim is made by the injured party, the insurer has a right to defend the Insured by stating the unintentional damage. Liability Insurance helps the Insured in covering the legal cost of such trials as they most of time are starched over a long period.

There are many types of Liability Insurance coverage offered by different Insurance companies. However it is important for us to assess the suitability of each Liability Insurance before deciding on getting one. We should go through the clauses of each type of Liability Insurance and try to buy one which provides us with best of benefits and is affordable. Below we are going to discuss some of the important and most common Liability Insurance:

Employer's Liability Coverage: Under this Insurance the employer is provided with coverage for protection against the claim made by any employee being injured during his office tenure. In other words if any employee is hurt or injured during working hours due to any negligence on employer's part, the insurer is liable to compensate the employee on behalf of the employer.

Public Liability Coverage: Most of our industries and commercial projects are based on various processes and activities which in turn may harm the general public health or invoke potential damage. Public Liability Coverage comes as a suitable aid for such claims. In these cases the insurer is liable to compensate the general public if any loss is incurred due to Insured party activities. In most of the countries this liability coverage is considered mandatory if you dealing in public services.

Product Liability Coverage: Product Liability coverage does not falls under the compulsory category of insurance in many countries. But few places like UK, it is essential for companies involved in manufacturing of consumer goods to acquire some form of product liability Insurance.

D & O Liability Insurance: It stands for "directors and officers" liability Insurance. This Liability Insurance is intended to cover the acts of directors and officers in any company. It simply states that the whole company cannot be held liable for any claim or act made on part of these directors or officers.

Professional Liability: This liability Insurance is intended to provide coverage to people who are considered to be professional or expert in certain field. Since they are understood to be expert hence they hold greater liability towards their customers.

Above discussed are the most common types of Liability Insurance in practice. Liability Insurance has given new horizon to Insurance world. It has provided protection to the common public against all sorts of injustice and malpractices.