The Purpose of Liability Insurance

Well, this is exactly what Liability insurance is all about.  It will cover any losses or damages incurred by another party, but it will offer no protection to the policyholder’s own possessions or physical health!  You may think this is a fairly pointless type of cover to have, but it is actually very useful indeed.  Anyone who is looking forinsurance that will protect their own interests will have plenty of policies to choose from.  However, if it is third party claims that you are concerned about, then only liability cover will give you an adequate amount of protection.

But why would anyone actually consider having liability cover?  This is a simple question to answer; it may be there for the benefit of other people, but it will also offer financial protection to you!  For example, if you were an employer and one of your staff was injured in your place of work, then they may take you to court over it.  And that is when liability cover will come into its own.  It could certainly end up saving you an enormous amount of money in legal fees!

Anyone looking at different insurance policies will see that there are several types of liability cover; so it is important to find one that fit your personal requirements.  The protection that you choose will need to be relevant to your profession and several other factors.  Here are a few of the different kinds that you are likely to come across and a brief explanation of each.

Employer Liability Cover
All businesses are legally obliged to have this type of insurance.  It is specifically shaped around employment protection from an employer’s point of view.  If any of your employees are ever injured or are unwell as a direct result of your business, then this will give you financial protection against any legal costs incurred.

Directors and Officers Liability Cover
You may also come across this under the moniker of ‘D and O Liability’, but it is exactly the same type of insurance.  This cover is tailored around issues arising within a company’s ranks.  When a statement, action/lack of action or any other mistake is made by a business, it is not the entire company’s fault.  Any damaging decisions are made by an individual within the management structure and thisinsurance is taken out to cover this kind of situation.

General Liability Cover
This type of policy will protect a company from a variety of claims by third parties.  It has ‘general’ in its title because it is not designed for any specific area.  You could compare it to carinsurance in that it will protect you from most common mishaps.

Professional Liability Cover
You will only need this type of insurance if you are deemed as being an ‘expert’ in your line of work.  If your job involves you giving professional advice to clients, then professional liability cover is a very importantinsurance to have.  Anyone can make mistakes once in a while and this sort of policy could prove to be an absolute godsend!