Liability and Property Insurance Protection
What is Liability and Property Insurance Protection?
In most cases, while trying to protect one’s life in a society there is the possibility of inflicting injury to another person or institution. Liability insurance provides protection to the insured party with protection against claims resulting from injuries and damage to other people or property.
liability insurance indemnifies the third party for unexpected damage caused by the negligence of the insured. take, for instance, Franklin purchased liability insurance for his car, it entails that if unfortunately he happens to get into an accident with the car and injured someone or damage somebody’s property, the liability insurance will provide compensation to the affected person on behalf of Franklin the insured. Most importantly, intentional damages and contractual liabilities are generally not covered in liability insurance policies.
Liability insurance redeems in payments directly to the third party and not the policyholder but to the injury, the insured inflicts on others (third party)
Three basic features of injury in this regard are discernible.
a. Physical injury to another person, something leading to loss of life
b. Damage to someone’s property. this damage can be physical, sometimes leading to total destruction of that property. An example is setting a neighbor’s car on fire. The damage may be non-physical; e.g inflicting economic loss in business operations. However, the issue of insurability will arise, since speculative losses are generally considered uninsurable risks.
c. Damage to other persons and/or their interests due to non-observation of one statutory responsibility. This would normally invoke legal action by an employer of accident prevention measures, statutorily stipulated, which leads to injury to a worker.
While the three distinctions above relate to the nature of the damage, three discernible areas of operations can be mentioned: Activities in the air (air travel), activities on the seas (marine business), and activities on land.
Why do you need to have Liability/property insurance coverage?
a. Unexpected loss coverage: Liability insurance pools you out of loss when you mistakingly injure or damage someone’s property unknowingly. in this, you need liability insurance to have yourself protected from an unexpected happening.
b. Risk Protection: It helps to protect you and your business against any risk arising from business operation
c. Personal injury liability: You need liability insurance to get you covered from such issues as wrongful entry, slander, and false arrest.
d. In most cases, if damages are filed against you or are sued, the insurance company takes care of the investigation expenses, attorney, and medical expenses in the case of injury.
e. Liability insurance helps you in providing urgent compensation to the victims or third-party.
Types of Liability Insurance
a. Employer Liability: This is liable to the injury sustained by workers, where the injury is traceable to the negligence of the employer and the worker is at the material time performing his duties to the employer. Occupational diseases of the employees come under this scheme, where the diseases result from the employer’s negligence.
b. Public Liability insurance; Sometime the activities of an individual may cause injury or damage to another person, his property, or interest given to the victim seeking redress or compensation. The compensation sought may be beyond the financial means of the individual to pay.
Where a court action by the victims becomes necessary the wrongdoer may even have to, pay legal costs of the victim, in addition to the court award for the mishap.
It is for this reason of self-protection by an individual against claims from victims of his act, for which he is liable that the individual buys insurance. This is public liability insurance.
There are many types of activities of an individual and different possible types of injury or damage to others emanating therefrom. There are thus also various types of insurance under this category. Examples of some of them are given below.
c. Personal Liability insurance: A badly constructed staircase in a house may cause bodily injury to someone who falls while using it, and crossing a road without care for traffic may cause an accident. Depending on the extent of the damage or injury from the fall or accident, liability claims from victims may arise.
d. Professional Liability: Professionals whose expert opinion and advice, are sought or who are consulted by the for discharge of some responsibility run the risk of wrongful advice or execution of job. Such professionals are lawyers, engineers, accountants, medical doctors, insurance brokers, and many others.
e. Product Liability insurance: Product liability insurance protects against lawsuits arising from injury or death caused by the insured product. Manufacturers are conscious of the fact that sometimes their product may be defective, with the possibility of causing injury or damage to the purchaser, giving rise to claims. In the late sixties, a widely known case in Europe was that of a tablet, a pain killer.
Many of those children born in those periods were deformed. An investigation uncovered the fact that these children were from expectant mothers who had consumed the painkiller. The manufacturer was severely penalized, running into millions of money. Product liability is insurance covering the risk of defective products.
f. Commercial liability insurance is a standard commercial general liability policy also known as comprehensive general liability insurance. It provides insurance coverage for lawsuits arising from injury to employees and the public, property damage caused by an employee, as well as injuries suffered by the negligent action of employees. The policy may also cover infringement on intellectual property, slander, libel, contractual liability, tenant liability, and employment practices liability.
Areas of Liability insurance coverage
Liability insurance covers the following.
i. Lawsuits, Investigations, and Settlements: If your business is being sued for any damage caused to a third party, the insurer covers the expenses of investigating officer or lawyer.
ii. Medical Expenses: In case of an injury to a third party attending your office, the medical expenses will be covered
iii. Damage or injury due to an accident in your premises or from your products, operations, or promotional advertisements leading to a third-party liability claim will be covered.
iv. Liability arising due to damage to a third party’s property while visiting your office will be covered
In today’s business, people are faced with a whole lot of business risks, and as such people are beginning to look for the very possible way to reduce the adverse effect of such risks leading to property damage or accident.
Liability insurance is a policy that offers protection to businesses and individuals from the risk that they may be held legally or sued for negligence, malpractice, or injury. This insurance policy protects the insured from legal payouts and costs for which the policyholder is deemed to be responsible.
Note: intentional damages and contractual liabilities are generally not covered in liability insurance policies.