Liability Insurance compensates the insured person against the claims of third party in the event of some damage or loss to property of third party. This covers accidental loss and provide coverage to recover this loss. As a matter of coincidence while driving you may hit someone else car sustaining financial loss. This event is totally unplanned and uncontrollable for all of us. This liability insurance save us from heavy financial burden all of sudden. Make sure, liability insurance do not compensate if the loss made to third party was planned and intentional and also if there was some contract or agreement showing that you will reimburse the victim party in case of loss. Another very important fact is, when claim for liability insurance is made this amount is being paid to third party and not the insured person to maintain the integrity and rule of liability insurance. This in fact covers your negligence by assuming it was never your intention to suffer from accidental encounter and pay financial cost to the victim.
There are various capacities in which benefits of liability insurance are being offered by insurance company.
In some course of work, unintentionally, one person gets suffered from any injury or illness through work of any individual or business. In such case that individual or business is liable to compensate the victim. This is called as “Public Liability Insurance”.
Production, repair or delivery work is subject to unexpected event like collapse, damage and obsolescence of goods in transit. Such activities need to be insured in case third party (client) gets effected through any loss. In such condition insurance company is ready to pay third party all funds to compensate his/her loss and also legal expenses if arising.
Health and safety laws require employer to secure its employee from injury, disease or any illness caused by working on employer’s workplace. Employee for this sake, insured the business and use this insurance coverage to fulfill the remedial and medical expenses incurred in case some accident, injury or bad effect happens to the employee at work. Employers’ liability insurance is part of statutory responsibility of an employer.
For professionals like doctors, solicitors, accountant and auditors, public interest is foremost than their own interest. In order to save their client from unintentional mistake, they go for “Professional Indemnity Insurance”. This is also another type of liability insurance.
With respect to business, there are General as well as Directors and officers liability insurance. In general liability insurance, over all business is protected from third party claims. In case of Director and officer liability insurance, insurance coverage is considered with respect to negligence of officer and director and not the whole business.
All of these types of liability insurances, protects, compensates and facilitates the insured person against loss resulting from unintentional malpractice or negligence. By paying yearly insurance premium, all uncertainties can be covered till maximum possibility.
Make sure, if insurance company reach at the evidence showing professional, business, director or any official under this liability insurance are tactfully doing the malpractice to willingly effect the third party or client, they will not be entitled to this claim.