Liability Insurance
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Liability Insurance Overview

The need for coverage these days is paramount and this is because of the truth that we live in an economically uncertain environment and one in no way is aware of when financial assistance is required. Insurance acts as a safety blanket and protects clients from various issues that may arise. Coverage plans are of diverse types based totally on the requirement. The most usually accumulate policies are existence coverage policies, medical insurance, etc.

But, there are different coverage policies that are quite unique in nature and correspond to positive specific requirements. These forms of policies are procured via customers who require cover handiest for positive troubles and not conventional one's life and health. One among this is the liability insurance.

Liability insurance is a policy that offers safety to businesses and individuals from the danger that they may be held legally or sued for negligence, malpractice or injury. This coverage policy protects the insured from prison payouts and expenses for which the policyholder is deemed to be accountable. But, contractual liabilities and intentional damage are commonly not included as part of this coverage.

This coverage was firstly created via agencies or people who experienced unusual risks and therefore created a fund to assist paying for every other's troubles concerning this. These policies provide cover towards their claims because the price will not be for the insured to the person that has been laid low with the harm brought on. In case a claim is made then the policy provider will cover the policyholder.

Why is Liability Insurance Required?

This sort of an insurance policy is normally procured by means of groups or individuals who may be held dependable, legally for injuries or different issues. This especially the case for hospitals, docs or maybe commercial enterprise owners. An instance, would be, if a product producer sells products that have been faulty or causes harm to other's merchandise, then he/she may be sued for the damages brought about. Buying a liability coverage will cover the producer from ensuing legal costs.

Liability coverage is one part of the general insurance policy itself beneath the risk transference category. In many nations, liability coverage is obligatory, especially for drivers of public delivery automobiles. The scope of this coverage in India has been described through the general public liability insurance Act of 1991.

How Is The Liability Insurance Imperative For A Business?

Whether small, medium or large, any enterprise should consider acquiring liability insurance as the coverage procured protects it from the risk of getting sued and keeping the brand image at stake. The policy covers third-party liabilities that arise from a range of business operations, premises, and products. Along with this, liability insurance also covers the risk when an employee of the organization gets injured while operating the business.

How Can Liability Insurance Provide Coverage And Help?

Liability insurance is the first thing chosen by any business enterprise as:

  • It defends the organization when legal liabilities arise as well as handles the claim on behalf of the company.
  • It extends the coverage to the international level as well, when the company has widened the operations across the nations.
  • It avails global master control program.

What Is The Coverage Scope?

The liability insurance policy coverage limits as agreed by the insured and the insurer at the time of signing the policy documents. The coverage may vary from organization to organization. It generally includes:

  • Property damage and physical injury
  • Personal and advertising injury
  • Medical expenses
  • Premises and operation liability
  • Products and operations liability
  • Limited contractual liability
  • Supplementary payments

What is Not Covered?

What's your liability plan covers is a matter of the substantive state law of your state. One state's court may control what a liability plan covers; while an adjacent state rules may not. There are some types of occurrences that are not insured and are disqualified from the meaning of occurrence across all liability plans:

  • Injury to an Employee
  • Automobile Liability
  • Damage to Business Property
  • Pollution
  • Products-Completed Coverage Understanding Limits

Single Occurrence Limit: This is the limit the insurance company will pay in one event.

Aggregate Limit : This is the highest amount the insurance company will pay in the plan term period for all events. Mostly, this is two times the single occurrence limit.


  • Liquor Liability
  • Employ practices
  • Worker benefits

Liability Insurance Claim Process

Basically, when it comes to liability insurance then you may know that their process varies from insurer to insurer. With a basic form that has to be filled for the same with all the required documents should be submitted on time. In case of liability insurance claims then filing the same would not be easy as it includes court cases or an out-of-court settlement. The claims process will be different based on what the claim is being made for.

Companies Providing Liability Insurance Policy

There are many companies in India that deals in the different types of liability insurance covers. Some of these are -

  • HDFC Ergo Commercial General Liability - This insurance policy offers complete protection against claims of property damage and bodily injury.
  • ICICI Lombard - It provides several liability insurance covers that can easily go well with the business requirements.
  • Bharti AXA Commercial General Liability Policy - This plan basically provides coverage for liabilities which are a result of business processes and operations.
  • TATA AIG - It provides a Commercial General Liability Insurance Policy that covers third party liabilities


1. What is Liability insurance?

Liability insurance is basically an insurance policy that provides coverage to the businesses/individuals and companies in case of legal hassles and if they are sued because of any harm that caused to another person by their products and services.

2. What is not covered under this insurance policy?

Intentional harm and contractual liabilities are not liable to get coverage under a liability insurance policy.

3. What are the different types of liability insurance available?

There are many liability insurance policies available. These include third-party liability, public liability, product liability, employer liability, professional liabilities, industrial risks and so on.

4. What companies in India provide liability insurance?

Among others, ICICI Lombard, TATA AIG, and Bharti AXA provide customers with a liability insurance, among others.

Last updated on 11-11-2020