Liability insurance helps individuals and companies

There are many types of liability policies to protect individuals as well as businesses and other organizations against the possibility of causing damage to the property of others, bodily injury or death. And such plans are essentially divided into two general types: personal and commercial.

One of the most common types of personal liability coverage is that for homes and vehicles. When homeowners and property owners purchase the policies, they have a degree of protection against potential lawsuits arising from damage, injury, or death resulting from the use of the insured homes, other structures, and land. Most homeowners insurance plans offer some level of protection against lawsuits, but an umbrella insurance policy offers even greater coverage at relatively affordable rates.

When it comes to vehicles, liability plans are required by law in every state to be legal to drive on public roads. Such policies are divided into three segments. The former pays the cost of medical treatment for a person’s bodily injury and typically ranges from a minimum mandatory amount of between $10,000 and $50,000, depending on the law in the state in which the vehicle is licensed. The next segment pays medical expenses for treating bodily injuries of more than one person and is typically double the amount charged for injuries to one person resulting from the use of an insured vehicle.

The last portion of vehicle liability pays for damage to other people’s vehicles or property, such as in a collision or a vehicle that becomes upset causing the driver to lose control and possibly damage a structure or other item. Such coverage can be as low as $5,000, under some state laws. But that can leave a car owner vulnerable to a lawsuit if damages exceed that amount. In that case, an overarching plan can make up for the difference.

For commercial enterprises, liability protection is a great necessity and bought by any sane entrepreneur. Such policies can range from workers’ compensation insurance, which is required by law in every state except Texas, where employers can choose to opt out of such plans. Workers’ compensation pays the cost of medical treatment and wages for workers injured on the job in exchange for not engaging in costly legal battles that could deadlock courtrooms and leave a party with a potentially serious loss.

Other types of commercial liability protect those doing business with policyholders and may include coverage for damage, injury or death resulting from the use of a product sold or services rendered. Other types may insure against injury to covered property or may fiduciarily protect the assets controlled by a company.

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No matter what type of coverage an individual or commercial enterprise needs, having at least some degree of protection is a wise move and, in many cases, required by law by state law.