Liability insurance is one of those elements to a policy that exist, but can be unclear why it is there. Typically it can be a high limit in excess of the millions, and can be pretty vague in what it is actually covering. So, with that in mind, we will be diving in to discuss what liability insurance is there for, and how it is protecting you.
Negligence
This is the number one word associated with liability insurance, and the number one determining factor in establishing whether or not a claim exists. Liability insurance is simply covering the named insured (the names listed at the top of the policy declaration page) for anything they have or have not done out of negligence. For example, if you live in an apartment complex, and you burn it down due to having a candle lit and it becomes uncontained, you are liable for the damage sustained to the property you are renting, as well as any resulting damage to other’s property that is sustained due to the fire. This can become quite costly in these instances due to the size of the apartment buildings, and how many units may be contained within. The buildings are expensive to rebuild or replace, and the property of others would also be a part of the liability claim
In essence, liability insurance exists to cover our actions, and how they can negatively affect other people. Causing a car accident due to swerving out of the way of wildlife is something that you are liable for. Your actions were unintentional, yet they caused damage. And that is really the key in these types of situations- intent. Insurance will not respond to actions which are intentionally committed, nor will insurance cover criminal actions, which is why negligence is the number one determining factor in these types of claims.
If you have more questions about liability coverage, or if you want to know more about how to protect yourself with higher limits, contact your insurance broker.