Liability insurance is a part of general insurance which provides the insured with protection against the risks of liabilities imposed by lawsuits and similar claims. It covers both legal costs and payouts for which the insured party will be responsible if found legally liable. However, intentional damage and contractual liabilities are generally not covered in these types of policies. It is designed to offer specific protection against third-party insurance claims ,so it’s also called third-party insurance.

Here are the main types of liability insurance:

Employer’s liability and workers’ compensation provides coverage to protect the business against liabilities arising from injuries or the death of an employee.

Product liability insurance protects against lawsuits arising from injury or death caused by their products.

Indemnity insurance provides coverage to protect a business against negligence claims due to financial harm resulting from mistakes or failure to perform.

Director and officer liability coverage covers a company’s board of directors or officers against liability if the company is sued. Some companies provide additional protection to their executive team even though corporations generally provide some degree of personal protection to their employees.

Director and officer liability coverage covers a company’s board of directors or officers against liability if the company is sued. Some companies provide additional protection to their executive team even though corporations generally provide some degree of personal protection to their employees.

Umbrella liability policies are personal liability policies which protect against catastrophic losses. Umbrella liability coverage generally kicks in when the liability limits of other insurance are reached.

Commercial liability is an important segment for the insurance industry. With premium income of USD 160 billion in 2013, it accounted for 10% of global non-life premiums of USD 1 550 billion, or 23% of the global commercial lines premiums. Liability insurance is far more prevalent in the advanced than emerging markets. The advanced markets accounted for 93% of global liability premiums in 2013, while their share of global non-life premiums was 79%, according to liability claims trends: emerging risks and rebounding economic drivers, Swiss Re sigma, Sept 2014. The US is the largest market. This is due to the size of the US economy and high penetration of liability insurance.

Leave a Reply

Your email address will not be published.