The Basic Understanding of Liability Insurance

October 08, 2017

The Basic Understanding of Liability Insurance

The Basic Understanding of Liability Insurance - Insurance is the way you protect yourself, your properties and others financially when something happens unexpectedly. In our life, there are many things that can be happened unexpectedly such as car accident, working accident, natural disaster and other unexpected situation. In those situations, everybody can lose properties or even life. You will never know when it will be happened, but with insurance, whether you are ready or not, it will support you financially. In those unexpected situations, it is possible that you are the one who are responsible to the damage and loss as well as the medical bill. When you don’t have any insurance, the cost of covering the others’ damage properties and injuries will quite frustrating. You can protect yourself financially from that kind of situation by applying liability insurance. We are going to discuss briefly about what liability insurance is and how it can help protect you.

The Basic Understanding of Liability Insurance
The Basic Understanding of Liability Insurance

Liability Insurance

Liability insurance is one type of insurance that will financially protect you from being responsible in others’ properties damage, loss and injury. To purchase liability insurance, you need to pay a monthly or yearly premium. When something happens unexpectedly, the insurance will exchange the premium that you have paid with their service to cover the bills. There are some procedures that you need to follow before you can claim the bill to the insurer.

The simplest example is when you get involved in an accident and you are the one who cause the accident. The accident can damage the others’ properties, such as vehicles, public or private properties, and other properties. Besides the damage, it is possible that somebody get hurt or injured. Therefore, you need to be responsible with the damages and the injury. You need to pay the bills. By having liability insurance, the insurance can help you cover the bills. From that example, you can see the importance of liability insurance. You don’t have to worry about bills that come to you for being responsible. Just image that you don’t get protected with the insurance, you will cover the bills by yourself. Whether or not you have enough money to cover the bill, it will always be harder. 

The Usage

There are some other usages of liability insurance that you need to know before purchasing this type of insurance. This type of insurance is used many businessman to protect their business from risk in working place. When something bad happens during the business operation such as injury, this insurance can cover the medical bill. Commonly it is called Employer’s Liability and Worker's Compensation. Liability insurance is also used a lot buy product manufacture. This type of insurance will protect the manufacturer financially, when the product that is made by the manufacture causes damages or injuries to the one who purchase the product. It is commonly called Product Liability Insurance. Medical practitioners also use this insurance to protect themselves when the patients get injured caused by their medical practice. When liability insurance covers something that caused by your mistake, it can be called Indemnity Insurance.
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