Liability Insurance: Features, Inclusions, and Exclusions
Even the best Businesses often face liabilities as they are unpredictable and occur at any time. You cannot ignore them as trivial as it may they may grown on to threaten the very existence of your business. It is important to keep your business sheathed from harm caused by liabilities.
What is Liability Insurance?
Liability Insurance is the type of insurance which helps you cover the financial losses caused by liabilities in a business. For example, an accident in your site may cost you millions in litigation and other charges. Having Liability insurance in these cases as it covers these losses.The coverage typically covers the cost of legal defense and any financial settlements or awards in the event of a successful claim against the policyholder. There are various types of liability insurance, including general liability, professional liability, product liability, and more, which cater to different industries and exposures to liability.
Why is Liability Insurance important?
Liability Insurance is an essential coverage that must be availed by all the business owners. It helps you protect your business from claims that your business caused (whether it is accident, injury or other legal issues). Also, it protects you from lawsuit in the event of an unknown error in your business causes harm. Liability insurance keeps the business protected of being held liable or sued for harm. Generally, it is seen as an important tool that helps you in smooth conduction of business.
Types of Liability Insurance
| Insurance Type | Description |
|---|---|
| Product Liability Insurance | Protects business owners against claims from customers due to harm caused by defective products (e.g., exploding gadgets or contaminated food). Essential for product-based businesses. |
| Public Liability Insurance | Covers your company, employees, and products against claims involving harm to the public. Mandatory for businesses in hazardous industries in India. |
| Professional Liability Insurance | Protects professionals against legal costs arising from negligence, errors, or omissions in the delivery of their services. |
| Third Party Liability Insurance | Required by Indian law for all vehicle owners. Covers damages or injury claims by third parties in case of vehicle-related accidents. |
| Employers’ Liability Insurance | Also known as Workmen’s Compensation Insurance. Covers employee claims for workplace injuries or illnesses. Particularly vital for factories and industrial settings. |
Coverage of Liability Insurance
- Death or damage to the property in the event of malfunctioning of the product for Product Liability Insurance.
- Public Liability Insurance covers the claims arising due to accidents, death, and injuries that happen in your office premises
- Professional Liability Insurance can be availed by people involved in medical profession like practicing doctors and lawyers. It can cover the liabilities that arises out of their genuine mistakes
- For employer’s liability insurance, it covers the claims made against accident or death of employee within the factory premises
Exclusions in Liability Insurance
- Intentional Damage
- Malicious intent or Dishonest acts
- Lacking Contractual obligation like not having sufficient safety measures as required by Industrial standards (eg: Fire extinguishers)
- Liability due to Pollution
- Costs incurred due to recall of a product
- Damage due to war or nuclear conflicts
- Wear and Tear, depreciation and consequential loss
Claim Process for Liability Insurance
In order to avoid claim rejection, first purchase the policy that would most suit your requirement and secondly, read and understand the terms and conditions of the policy completely,
- Inform the insurance company immediately after an accident
- Collect the evidences
- Submit the duly filled claim form and include all the supportive documents along with it
- The Insurance Company will appoint a surveyor who will come and scrutinize the incident.
- Based on the report of the surveyor, the insurance company will either settle or reject your claim
Advantages
There are several reasons why you should apply
- IVA Insurance is an IRDA Approved Direct Broker (Life & General).
- We are here to assist you 24/7.
- Our unbiased approach ensures you get the best options.
- With over 55 insurance companies and hundreds of health policies, Fincover cuts through the clutter and helps you choose the one that is best for you.
FAQs
Is it Mandatory for every business to have liability insurance?
Though, it is not mandatory except for businesses operating from hazardous areas to have liability insurance, having one helps as it could save you millions from any unfortunate event
What is not covered under liability insurance?
Intentional loss and contractual liabilities will not be covered under Liability Insurance.
Who can avail professional liability insurance?
Any self-employed professional whose profession involve risks like doctor, lawyers can apply for professional liability insurance.
Where can I purchase Liability Insurance?
You can purchase from the respective insurer’s web portal or even purchase at Fincover, which gives you a platform to compare multiple quotes from different insurers.
