Insurance coverage serves different purposes depending on the type of policy. The primary purpose of insurance is to protect yourself, your investments, and your property if something unexpected happens.
Liability insurance covers many situations. It protects losses related to damage to property or people, and in many circumstances, a combination of both.
Examples of liability insurance coverage include:
- Automobile liability insurance - Car insurance protects the public if an accident occurs, leaving someone with injuries or damage to their property. In most cases, the victim of an accident will seek compensation under an automobile insurance policy when they suffer harm in a motor vehicle collision due to another driver’s negligence.
- Homeowner’s insurance - Homeowners are likely to purchase coverage to protect their property from unexpected damage and destruction. However, homeowner’s coverage also protects guests and visitors that may suffer harm when visiting a property.
- Renter’s insurance - Renter’s insurance offers protection for the contents of a rental property and for guests that may suffer injuries visiting the rental.
- Commercial liability coverage - Businesses obtain commercial liability insurance to cover accidents and injuries on the business premises. Whenever a victim is in an accident with someone in the scope of their work duties, is behind the wheel of a company vehicle, or is on the property of a business, they can seek compensation under a commercial liability policy.
- Medical malpractice insurance - Injuries that occur during the treatment of a patient by a doctor or other healthcare professional that may have acted negligently in their actions or inactions can give the patient a claim for damages through medical malpractice insurance if available.
- Product liability insurance - If a victim suffers an injury due to a dangerous or defective product, the company that makes or distributes the product is likely to carry product liability insurance. Product liability insurance covers any damages or losses that may occur to a victim in this scenario.
How Does Liability Coverage Work?
Obtaining liability insurance begins when an individual, business, or organization seeks coverage for a specific purpose. They will receive a quote and contract for their policy, for which they will then pay their premiums in exchange for liability insurance coverage under allowable circumstances and situations. As part of selecting their preferred coverage and plan, an insured will choose the limits on their policy for specific damages and situations.
When an injury or loss occurs, the insurance coverage should kick in to pay for any covered losses under the plan. Covered losses will vary from policy to policy and may depend on the exclusions and circumstances that result in damage to an individual or property.
How Does Liability Insurance Protect?
The protection that liability insurance offers is two-fold. The motivation for an individual or other party to obtain liability coverage is to protect themselves from potential damages that may occur due to their actions.
Many people have assets such as homes, money in the bank, investments, and other property that can be at risk if they cause injury to another because of their actions. Liability insurance can offer protection from potential lawsuits and personal liability that can arise from an accident or incident resulting in injuries.
In addition to the protection that liability insurance offers the policyholder, in turn, it also offers protection for the potential victims that may suffer harm. When you are in an accident or suffer an injury due to the negligence of another person or entity, you hope and rely on the fact that they will be able to compensate you for your losses.
When a party does not have insurance, and a victim suffers an injury, it becomes much more difficult to collect compensation as you must do so personally against the at-fault party. Depending on the financial circumstances and assets of a particular individual, they may not offer you much of a payment.
With the common availability of liability insurance, it is more often than not that when an injury happens to a victim, that victim will be able to pursue compensation through the insurance claims process.
What Does a Personal Liability Policy Cover?
Personal liability insurance can cover a wide array of situations that can lead to an injury to a person or damage to property. When someone purchases an insurance policy, they will evaluate coverage options and what the policy does or does not cover. Typically, a liability policy will shield the policy owner from liability for certain losses up to a certain monetary limit. For example, many policies separate property damage losses from bodily injury losses, such as in motor vehicle insurance or homeowner’s coverage.
A personal liability policy will protect individuals and their families if certain accidents occur in their vehicle, home, or property. Personal liability policies offer personal protection from victims that may seek compensation following an injury against an individual in a personal capacity. This contrasts with a commercial liability policy that would protect a business and its assets versus an owner or manager.
A personal liability policy can cover losses that arise from:
- Motor vehicle accidents
- Slip and falls
- Premises liability injuries
- Boating accidents
- Motorcycle collisions
What Does Liability Insurance Cover If You’re Not at Fault?
Liability insurance covers damages up to the policy limits for losses to victims due to the negligence or actions of the policy owner. When the individual seeking compensation for their losses is the victim of another, the insurance of the at-fault party is responsible for paying these losses. In a personal injury scenario, you can recover both economic and non-economic damages under a liability insurance policy.
Economic damages reflect the financial burden on the victim. The estimation of economic loss is through proving monetary loss or expenses. On the other hand, non-economic losses are not typically measurable in terms of money as they are quite personal. These losses are often subjective, and calculating the equivalent of these losses in terms of money for a personal injury claim can be challenging.
Examples of damages recoverable for a victim of negligence under a liability insurance policy include:
Medical
Personal injuries often involve medical treatment, including emergency medical services, ambulatory services, emergency room visits and treatment, follow-ups by medical providers, surgery, and rehabilitation.
In an insurance claim, a victim may seek compensation for the entirety of their medical losses allowable under the policy. This usually falls under the bodily injury protection of a policy, which is commonly a higher limit than the property damage such as in a motor vehicle accident.
Income
The interruption to a victim’s income occurs because of an accident and their injuries are recoverable under a liability insurance policy. In most circumstances, individuals will suffer losses due to missed hours of work during the healing of their injuries, but for those with the most severe personal injuries, the loss of income can include future loss of income and impact on their ability to earn a living throughout their life if they face permanent disabilities limiting their functions.
Loss of income also falls under the bodily injury portion of liability insurance coverage. Depending on a policy's monetary limitations, this can be problematic if the injuries are serious or catastrophic.
Many people carry liability insurance coverage that is too low and if an accident victim suffers severe injuries or there are multiple victims, policy limits can run out rather quickly. In these instances, your attorney can use other options to recover the remainder of your damages.
Pain and Suffering
Another damage that is recoverable under a liability insurance policy’s bodily injury coverage is a victim’s pain and suffering. The pain you experience during and after an accident from your injuries as well as the inconvenience and disruption to your life from your injuries are recoverable in an insurance claim.
Insurers are often skeptical of pain and suffering damages and may try to limit your ability to recover the true extent of these losses to you. However, a knowledgeable and experienced personal injury attorney can help a victim not only claim these damages but prove them to the insurer, increasing the likelihood they can recover for their pain and suffering losses in the insurance claim.
Property Component
Property loss is a separate loss from those involving bodily injury. Most insurance policies set different limits for the repair or recovery of lost property value due to a covered loss. In most instances, property coverage is a straightforward process of getting estimates for repairs or the total loss of personal property and including it in your claim.
However, in situations where a vehicle’s damage or other damage to property might exceed the policy’s limits, it can create issues for the victim in recovering the full amount of their loss. This can happen when an insured’s policy limits are too low or multiple victims in an accident must the policy limits, further restricting the amount of money available for compensation.
Wrongful Death
In many unfortunate situations, an individual does not survive an injury or accident. In these scenarios, the surviving family of the victim may file a claim for losses under the liability insurance coverage. Wrongful death insurance claims can be complex.
Calculating and proving wrongful death losses is difficult and no money can replace the loss of life. A wrongful death accident attorney can help the family of a wrongful death victim understand what losses are recoverable and how they can file a liability insurance claim for those losses that are likely to be successful.
Can a Lawyer Help You With the Insurance Claims Process?
Many personal injury victims may not think of the importance of a personal injury attorney during the liability insurance claims process. For many, having an attorney seems like a luxury rather than a necessity.
When going up against an insurance company, you need an attorney to fight for the compensation you deserve, no matter the situation. Insurers will put up a fight and will not willingly pay you for the maximum losses you sustain in your case. If you hire a lawyer in the days following an injury, you set your case up for success rather than the .
A personal injury lawyer deals with insurers in many, if not most, of their cases. They understand the tactics and common practices insurers will engage in when dealing with a claim. Having an attorney represent you with an insurance claim from the beginning can help you reduce the chance of your case going to trial or that you will face a denial of coverage under the policy. Do not underestimate the value of a lawyer in a liability insurance policy claim.