Insurance Policy

Liability insurance is a mechanism to provide financial recompense for third parties, who suffer due to accidents caused to or due to insured items or properties owned by others. US law provides compulsory coverage for these risks in liability insurance policies taken by people who own such insured items or properties.

These policies provide indemnity to their owners from provable limited legal liability that may be thrust on them after such accidents.

This article attempts to inform you about the various types of liability insurance policies in various insurance sectors.

General liability insurance policy: It is known as a third party liability policy. It provides compulsory coverage to third parties. The insured person's own losses and damages or those that pertain to his/her family are not covered under this policy. This policy is available in all sectors of the non-life insurance field.

Employees, who use vehicles of their employers, must be provided insurance coverage under the policy to provide indemnity to the employer in respect of negligent accidents caused by the employee. Under the general liability policy, accidents, caused due to incorrect implementation of correct advice or design are covered.

However, if the accident occurs due to the advice or design itself being incorrect, then coverage will be provided by a professional liability policy.

Liability arising out of use of a product that causes damage to a third party, will result in the liability being imposed on all persons who have handled that product.. This also includes the product manufacturer. As such, the loss cannot be covered under the general liability policy.

Employer's liability insurance policy: It covers the personal injuries of employees, due to wrong acts of the insured or even those committed by the agents of the insured in the course of employment. Fellow employee negligence during employment is also included. Any injuries outside employment are excluded. Employer's liability insurance policies provide limited liability cover.

Professional indemnity insurance policy: It is known as the errors and omissions policy. It covers risks due to design and advice. It covers injuries to third parties and damage to properties of third parties. This is a legal liability policy. Therefore, without proof, it is not actionable for financial recompense.

Products liability insurance policy: This provides cover for loss or damage due to a defective product. Loss of the product itself or damage to it is not covered. Loss or damage caused due to defective workmanship is covered under the policy, but not the defective work itself.

The above are some liability insurance policies. You can search for and find various other aspects of liability insurance policies on the Internet. However, one aspect of all these liability insurance policies that is incumbent on third parties is the burden of proof. This last part is the most difficult and involves a process that takes a very long time.

Insurance Policy |