Walker Jack Consultants

What is Liability Insurance?

Liability insurance is a policy taken out by those who wish to provide cover for third party losses. This is a standard policy to have for small businesses and for the self-employed. It protects the policyholder against any losses or injuries suffered if the unexpected happens, if something goes badly wrong and any third party involved sues for damages. If it is found that the policyholder is liable for costs then the liability insurance will pay the third party for those losses.

Liability insurance does not cover for any losses incurred by the policyholder, either personally or to property. Separate policies must be taken to cover against personal losses and property damage. There are various levels of liability insurance and the policies are easy to obtain. Liability insurance tends to be cheaper than many of the other insurance policies available, as claims tend to be rare. These policies are available from most of the mainstream insurers and can be easily purchased online.

If a company, small business or self-employed person does not have liability insurance and the worst should happen and someone makes a claim against them for damages or injury, the costs can be enormous. They may find themselves liable for medical costs, loss of earnings, repairs for damage to property and compensation for stress related conditions. 

It is not compulsory that there is a liability policy in place, but having one is a good idea. The liability insurance policy offers peace of mind to the policyholder, because they know that they are covered in the event of something going amiss. It also gives peace of mind to the potential clients of any company or self-employed person who know that if the worst were to happen they would be fully compensated for any losses incurred.