If we saw a few years back, we knew only Life Insurance but now, insurance is a huge market. Although in India, insurance is not so popular but now this sector is growing in every field and this sector is spreading slowly and slowly. Now the people understand the necessity of insurance. We all are living in a uncertain world and no one knows when, where and how much financial need they required. Insurance is the best way to secure for unknown risks. It protects policy-holders from uncertainty that may arise. Insurance acts as a safety blanket so that policy-holder will not get any harm or losses.
There are various types of insurance plans are available in the market. The most common Insurance are Life Insurance, Health Insurance, Vehicle Insurance, Personal Accident Insurance, etc. However, there are other insurance policies also available that are quite specific in nature and correspond to certain unique requirements. These types of policies are procured by customers who require cover only for certain issues and not for generic once. Liability Insurance is one of them.
What is Liability Insurance?
Doing business is uncertain and businesses have to operate in these uncertain environments. Some liabilities are certain and foreseeable, while others are unexpected. A liability insurance policy is useful in such situations. A liability insurance policy offers to cover the business owners, professionals and self-employed people against the cost of compensation claims due to malpractice, injury or negligence. Liability insurance provides the insured party with protection against claims resulting from injuries and damage to people or property. Liability insurance policies cover both legal costs and any payouts for which the insured party would be responsible if found legally liable. Intentional damage and contractual liabilities are generally not covered in these types of policies.
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Types of Liability Insurance:
There are numbers of liability insurance policies available for customers based on their line of work and requirements. Each type is according to the industry and the requirement of that business. The most common forms of Liability insurance are Product, Public, Employers and Third-party liability.
- Product Liability Insurance: Product Liability insurance is for businesses that manufacture products for sale on the general market. If any injury or death caused by that product, this insurance policy protects you. For example, if someone eaten a packaged food and get sick or died and if someone’s mobile battery blast and customer get injured or died; at this time, this policy will work. This type of insurance is good for the food industry, chemical, tobacco, medical products, and others.
- Public Liability Insurance: Under Public Liability Insurance Act 1991, it is mandatory for business operating in hazardous areas to enroll into a Public Liability Insurance in India. Public Liability Insurance protects you from claims made against your company, products or employees which might have harmed general public.
- Employer Liability Insurance or Workers’ Compensation Insurance: The Employers’ Liability Insurance covers the owner of the company against claims by the employees. For example, if an employee is injured or died during his/her employment due to the job, in this situation the owner might require to compensate the employee for such damage. Under such circumstances, Employers’ Liability Insurance can indemnify your employees against any such unfortunate events and save you from hefty financial outgoes and legal hassles. Sometimes, companies do not deem this as important but if faced with a claim, they might be driven to bankruptcy.
- Professional Liability Insurance or Directors and Officers Liability Insurance: This liability insurance covers you and your company’s professionals like Director and officer if a claim made against you or your company. This liability insurance covers your financial and legal costs associated with claims.
- Third-Party Liability Insurance: Third-Party Liability Insurance covers damages caused by the policy-holder to another. Third-Party Liability Insurance is mandatory in vehicle insurance. Any human injury or property damage caused to a third party by your vehicle is covered under this insurance.
Advantages of Liability Insurance:
Insurance is always a better option in all aspects and a Liability Insurance is must for businesses that deal with public in some way or the other. Here are some of the advantages of Liability Insurance:
- It covers any accidental injuries caused to the insured
- Covers damage caused to another person or property
- Protects the insured from any wrongful activity
- Helps minimize risks