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Liability Insurance

Definition - What does Liability Insurance mean?

Liability insurance is any type of insurance which is purchased to protect a business, home, car or employer. It is generally purchased by those who have some risk of being held legally liable for other people's injuries.

For example, a manufacturer may purchase liability insurance to protect them in case one of their products injures a consumer, or a doctor may purchase liability insurance to insure them in case their actions injure a patient.

Protections offered by liability insurance

Although contractual liabilities and intentional damages are generally not covered under a liability insurance coverage, liability insurance may provide payment for legal costs and payouts to the injured party if a person or business is found legally liable.

For instance, if a business purchases liability insurance they may receive protection from property damage, medical expenses on the business property, personal injury to a third party, insurance against damage from products, personal advertising injury, and liquor liability.

Negotiating settlement with an insurance company

If you have been injured and the defendant in your case has insurance, assuming you have a good claim, you will generally be negotiating a settlement with the insurance company.
The negotiations will start with a demand letter, which you will send to the company. Next, the insurance adjuster will review your claim and counter offer. At this point you can decide whether to make another counter-demand or accept the offer. This process can continue until both parties have reached a settlement offer or if an offer cannot be reached, the case goes to civil trial.

Costs for Liability Coverage

Costs for liability coverage can vary based on the type of coverage requested and the number of employees covered. There are many companies who offer various types of liability insurance including Nationwide, Geico, Progressive, and Liberty Mutual Group. Talk to an insurance broker if you have questions about your liability insurance options.

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