What is Liability Insurance?

Liability insurance is a sub-set of general insurance which is used to protect the insured party against liabilities that could come about due to lawsuits or claims against them. If the insured individual or business is sued for anything that is covered by the insurance policy then the insured individual or business will be covered. In the past, prior to the creation of liability insurance as a unique type of insurance, companies in the same fields would pool their money together and form a self-fund through which compensation could be provided to members who suffered financial hardship through litigation.

Liability insurance is, at its heart, designed to pay money to third parties rather than to the individual who is insured. This means that if damage is done to a person’s home during the course of work, then the person doing the work will file the claim and the payment will go directly to their customer. The insurance company through which the policy is held has a legal right to defend their customer (the insured individual or business) and the costs of a legal defense typically do not affect the policy limits (unless the policy specifies that it does).

There are two primary reasons why a person would get liability insurance. When looking for car insurance, liability insurance will not cover damaged to your own person or vehicle in the case of an accident *if the accident was your fault* but it will cover and protect you from damage to another person or their vehicle. This is usually a case in which liability insurance is obtained over full coverage for a lower price. A second reason for getting liability insurance is in the case of businesses. Because of the unique situations that can arise in the course of doing business, it is important to be covered against unforeseen accidents that could result in litigation. One notable exception to the normal rules of liability insurance is during the case of a commission of a crime by the insured.

Finding Insurance

Finding the right insurance for your needs is going to depend on a lot of factors. Are you purchasing insurance for your business? Are you purchasing insurance for your cars or home? The reasons for purchasing insurance play just as big a role as the amount of insurance that you require. Most people would be better off trying to go through an insurance broker rather than trying to find the insurance themselves. Insurance brokers buy insurance for you for a fee but they are often able to get better rates than individuals. Beyond that, they can provide a reasonable overview to their clients of all of the options that are available to them.

Depending on your area, it pays to look around before settling on a certain insurance company. If you are located in or around the Arizona area, you may visit this website - Liability Insurance Arizona - to find the best. Liability insurance is a great way to meet state requirements for insurance at lower cost and to protect yourself and your business against litigation.