how liability insurance works
liability insurance is critical for those who are liable and at fault for injuries sustained by other people or in the event that the insured party damages someone else s property as such liability insurance is also called third party insurance liability insurance does not cover intentional or criminal acts even if the insured party is found legally responsible policies are taken out by anyone who owns a business drives a car practices medicine or law basically anyone who can be sued for damages and or injuries policies protect both the insured and third parties who may be injured as a result of the policyholder s unintentional negligence liability insurance is also called third party insurance for instance most states require that vehicle owners have liability insurance under their automotive insurance policies to cover injury to other people and property in the event of accidents a product manufacturer may purchase product liability insurance to cover them if a product is faulty and causes damage to the purchasers or another third party business owners may purchase liability insurance that covers them if an employee is injured during business operations the decisions doctors and surgeons make while on the job also require liability insurance policies special considerationspersonal liability insurance policies are purchased primarily by high net worth individuals hnwis or those with sizeable assets but this type of coverage is recommended to anyone with a net worth that exceeds the combined coverage limits of other personal insurance policies such as home and auto coverage the cost of an additional insurance policy doesn t appeal to everyone although most carriers offer reduced rates for bundled coverage packages personal liability insurance is considered a secondary policy and may require policyholders to carry certain limits on their home and auto policies which may result in additional expenses the global liability insurance market size was valued at more than 25 billion in 2021 and is expected to reach 433 billion by 2031 1although commercial general liability insurance protects against most legal hassles it doesn t protect directors and officers from being sued and it doesn t protect the insured against errors and omissions companies require special policies for these cases including types of liability insurancebusiness owners are exposed to a range of liabilities any of which can subject their assets to substantial claims all business owners need to have an asset protection plan in place that s built around available liability insurance coverage here are the main types of liability insurance 