Liablity Insurance
Liability Insurance helps you protect your company and your employees against legal claims arising from injury, property damage, or negligence. Unlike asset-based insurance which protects physical property, liability insurance safeguards the financial integrity and reputation of an individual or an organization from the unpredictable risks. Liability Insurance can be classified into three types; Professional, Statutory and General. Professional indemnity insurance is essential for doctors, lawyers, architects etc. protecting them against claims of negligence or errors and omission their professional advice. For the corporate sector arises the directors and officers (D&O) liability insurance, which has gained immense importance shielding the personal assets of the management from lawsuits relating to the breaches of their duty.
Liability Insurance helps you protect your company and your employees against legal claims arising from injury, property damage, or negligence. Unlike asset-based insurance which protects physical property, liability insurance safeguards the financial integrity and reputation of an individual or an organization from the unpredictable risks. Liability Insurance can be classified into three types; Professional, Statutory and General. Professional indemnity insurance is essential for doctors, lawyers, architects etc. protecting them against claims of negligence or errors and omission their professional advice. For the corporate sector arises the directors and officers (D&O) liability insurance, which has gained immense importance shielding the personal assets of the management from lawsuits relating to the breaches of their duty.
FAQs
When am I eligible to file a claim under a liability insurance policy?
- Professional error or omission: For professional indemnity, a claim is valid when a client alleges financial loss resulting from your faulty advice, technical error or negligence in providing professional services.
- Occurrence of a third-party loss: A claim can be initiated when a third party suffers bodily injury, death or property damage due to your business operations or within your premises.
- Wrongful acts by the management: Under D&O policy, a claim is triggered when a director or officer is personally sued for the alleged breach of duty, neglect or misleading statement in their official capacity.
- Defamation claims: You can claim if you are sued for non-physical damages of defamation, if covered under your specific policy wording.
Under what conditions will a liability insurance claim be rejected?
- Intentional or criminal acts: Claims are rejected if the injury or damage was caused by a willful, dishonest or fraudulent act committed by the insured or their employees.
- Contractual liability: Any liability assumed solely under a contract is generally excluded unless specifically added as an endorsement.
- Fines and penalties: Liability insurance covers compensatory damages and legal fees but it will not pay for criminal fines or penalties imposed by a court or a government body.
- Late notification: If the insurer is not notified immediately upon receipt of a legal notice or the occurrence of a serious accident, they may deny the claim due to the prejudice of rights.
What are the common extensions available in a liability insurance policy?
- Food and beverages (poisoning)
- Pollution liability
- Defense costs (legal extensions)
