If you want figure out what is liability insurance, then the simplest definition of liability insurance is that it is a type of insurance that protects a person or entity against claims started by another party. There are many different types of insurance policies available in the market but liability insurance is the most popular because it costs far less than many other options.
When you take liability insurance, it pays for the other party’s loss and this makes it different from a full coverage insurance which also pays for your loss, your damage and medical expenses due to injuries sustained by you. This means that with liability insurance, you are responsible for paying just the damages sustained by the other party and not you.
There are many different types of liability insurance coverage, including general liability, which offers coverage to businesses, employer liability, and professional liability. A general liability insurance protects a company from a third party claim. There is also a liability insurance known as D and O liability insurance that stands for Directors and Officers. This type of insurance offers protection to a director of a company or an officer in position; it ensures that the entire company is not held responsible for a mistake made by a director or an officer.
In the US, employer liability is also known as workers’ compensation and it is mandatory insurance that all businesses must have. This insurance offers some degree of protection should an employee get injured, or falls ill because of his or her job.
A professional liability is quite similar to malpractice insurance, but is not as comprehensive. This insurance protects professionals and experts in a given field, who cannot be protected by a general insurance because of their expertise.
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