What is Liability Insurance?

When it comes to preparing yourself financially, protecting your current status is important. No matter how hard you work, something could go wrong that puts your wealth in jeopardy. Luckily, liability insurance is available to help you in this area. What exactly is liability insurance and how can it help protect you?

 

Liability Insurance Basics

Liability insurance is a product that makes it possible for you to avoid having to pay any legal damages when you are at fault for an injury or for wronging someone else. This type of insurance comes in many different variations, but they all help accomplish the same goal. They ensure that if you are sued by someone else for something that you did or neglected to do, you won’t have to come up with the money to pay damages out of pocket.
 

Types of Liability Insurance

One of the most common types of liability insurance is with auto insurance coverage. Liability insurance for your vehicle is required in all 50 states. With this type of coverage, if you are at fault in a wreck, the insurance company will pay to repair the other person’s car and for any medical bills that person might have.
 
Another variation of liability insurance comes with your homeowners insurance policy. With this type of coverage, if someone is injured while they are on your property, the insurance company will pay for medical bills and any associated images, up to a certain point.
 
When you own a business, having business liability insurance is also critically important. With business liability insurance, if a customer is injured on your property or by one of your employees, your insurance will cover it. If a customer is wronged by something that you did or something that one of your employees did, you are covered. This makes it easier for you to conduct your business without having to worry about someone coming along and suing you for everything you’ve got.
 

Considerations

When you are purchasing liability insurance, make sure that you get the proper amount of coverage. Liability policies have a limit on how much they’ll pay. Because of this, you have to be careful that you don’t get a policy with a limit that’s too low. Otherwise, you might end up having to pay some money on top of what your liability insurance policy pays if you are sued by someone. Once you find the right policy, you can rest easy, knowing that you are covered.
 
Disclaimer: This is for information purposes only and NOT a recommendation from Mills Insurance. Please contact a licensed insurance specialist to discuss insurance coverage’s and laws.