Liability insurance is the portion of an insured's policy for expenses such as the injured persons medical bills, rehabilitative therapy, and lost wages due to the negligence of the at-fault individual. After adding up all of the medical expenses for the injured and the legal fees of the negligent person, the standard liability in one's homeowners or auto policy is often not enough.

Solution:
Liability Insurance. A personal liability umbrella insurance policy can give an individual added liability protection without a large added cost. Additional liability insurance is often inexpensive, especially compared to the added coverage one gains. Furthermore, liability insurance covers one's non-business activities anywhere in the world.

Types

1. Personal property floater: Similar to a scheduled personal endorsement designed to provide "all risks" coverage for unscheduled property on a worldwide basis.

2. Umbrella liability policy: Designed to provide additional liability coverage for catastrophic legal claims and judgments. The umbrella will pay only after the limits of the underlying policy are exhausted (requires the policyowner to carry certain minimum amounts of insurance).

3. Professional liability: Also known as professional errors and omissions (E&O) insurance/Malpractice insurance. The purpose is designed to cover liability arising from the failure to use due care and the degree of skill expected from a person in the profession in which the insured is engaged.



An Introduction to Insurance Policy Selection

Related Articles
  1. Insurance

    Is It Safe To Be Without Umbrella Insurance Today?

    At low cost, you can buy significant extra liability coverage in case you're sued due to an accident or other trouble. See it as bankruptcy protection.
  2. Insurance

    An Advisor's Guide to Prof. Liability Insurance

    A guide to what financial advisors need to know about professional liability insurance.
  3. Insurance

    Do You Need Casualty Insurance?

    Find out how different types of coverages can protect you and which policy is right for you.
  4. Insurance

    Insurance Coverage: A Business Necessity

    Don't go to work without this policy in place - especially if your work is in your home.
  5. Insurance

    How to Protect Your Assets From Litigation

    Personal umbrella liability insurance can offer you big-time legal protection relatively cheaply, in case your existing policies aren't enough.
  6. Insurance

    3 Reasons To Get Umbrella Insurance

    A relatively small annual premium can buy you a lot of peace of mind. In today's litigious society, that's money well spent.
  7. Insurance

    It's Raining Lawsuits: Do You Need An Umbrella Policy?

    This type of insurance protects your assets and future wages against lawsuits. Find out if it might benefit you.
  8. Insurance

    How To Invest In Insurance Companies

    Knowing the special circumstances that insurance companies operate under helps in evaluating whether or not a listed insurance company is a good investment and whether the economic environment ...
  9. Insurance

    6 Types Of Insurance Coverage You Didn't Think You Needed

    These different types of insurance coverage can be beneficial, but they're often overlooked and misunderstood.
  10. Small Business

    Understanding Limited Liability

    Limited liability is a legal concept that protects equity owners from personal losses due to their ownership interest in the company.
Frequently Asked Questions
  1. What are the Differences Between Affiliate, Associate and Subsidiary Companies?

    All three of these terms refer to the degree of ownership that a parent company holds in another company. Read on to find ...
  2. What Does it Mean if the Correlation Coefficient is Positive, Negative, or Zero?

    Learn what the correlation coefficient between two variables is and what positive, negative and zero correlation coefficients ...
  3. What's the Difference Between a Market Economy and a Command Economy?

    Set by supply and demand, a market economy operates through a price system; in a command economy, governments control the ...
  4. What Factors Cause Shifts in Aggregate Demand?

    Find out how aggregate demand is calculated in macroeconomic models. See what kinds of factors can cause the aggregate demand ...
Trading Center