Liability Insurance


DEFINITION of 'Liability Insurance'

Any type of insurance policy that protects an individual or business from the risk that they may be sued and held legally liable for something such as malpractice, injury or negligence. Liability insurance policies cover both legal costs and any legal payouts for which the insured would be responsible if found legally liable. Intentional damage and contractual liabilities are typically not covered in these types of policies.

BREAKING DOWN 'Liability Insurance'

Liability insurance is very important for those who may be held legally liable for the injuries of others, especially medical practitioners and business owners. A product manufacturer may purchase product liability insurance to cover them if a product is faulty and causes damage to the purchasers or any other third party. Business owners may purchase liability insurance that covers them if an employee is injured during business operations.

  1. Umbrella Personal Liability Policy

    A type of insurance policy that provides excess coverage above ...
  2. Professional Liability Insurance

    Insurance that protects professionals such as accountants, lawyers ...
  3. Umbrella Insurance Policy

    Extra liability insurance coverage that goes beyond the limits ...
  4. Business Risk Exclusion

    A type of coverage that is often omitted from product liability ...
  5. Deductible

    1. The amount you have to pay out-of-pocket for expenses before ...
  6. Liability

    A company's legal debts or obligations that arise during the ...
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