Liability insurance plans protect policyholders when they cause bodily injury or property damage to someone else. There are liability coverage options available for both individuals and businesses.

Why Is Liability Insurance Necessary?

According to Allstar Insurance in Lincoln, NE, liability insurance is an essential risk management tool. It’s especially vital to those who don’t have the financial means to pay for losses caused by their negligence. Depending on the nature of the other party’s injuries or the value of the property damage, the associated costs could create a serious financial burden for an individual or business without proper insurance.

How Does Liability Insurance Work?

There are several different kinds of liability insurance, but general liability is the most common. Under this policy, the insured party doesn’t have to pay out of pocket for injuries or damages. Instead, the coverage is designed to compensate for the other party’s medical expenses, as well as the cost of repairing or replacing their property. If a lawsuit is brought against the insured party, their legal fees will also be covered, as well as any payouts they are financially responsible for. Insurance providers will pay up to the limit of the liability policy.

By law, drivers in most states must carry a minimum amount of liability insurance to cover at-fault accidents. Renters and homeowners insurance policies usually include some personal liability coverage. Commercial general liability plans offer business owners the same protection for injuries and property damage. However, they also include personal and advertising injuries such as libel, slander, or an infringement on the rights of another.

When shopping around for liability insurance, it’s important to understand what policy limits are, along with the inclusions and exclusions of coverage. Contact Allstar Insurance at (402) 477-0900, or visit them online for additional information on their services.