Liability insurance is one of the most popular among a number of insurance policies in today’s market. It is very less expensive when compared to other types of insurance. Other types are more expensive because they have to cover more areas.
The insurance covers the losses of third parties. An owner of the policy and his property are not protected by the insurer. The concept of liability insurance is that, the insured will be protected from being held responsible for the damage of third party.
Liability insurance is of five types: Public liability insurance, Product liability insurance, Employee liability insurance, General liability insurance, Directors and Officers Liability Insurance, and Professional liability Insurance.
Public Liability Insurance:
A range of processes and activities that have a potential to affect the third parties are the main factors that act as a basis for industry and commerce. The exclusions, conditions and warranties included in the liability insurance policies are burden for most organizations. Still they include the public liability insurance policy in their portfolio. For example, a company that has an industrial facility, may purchase a pollution insurance in order to cover any law suits that may result from environmental accidents. The parties which are more prone to risk of public liability are occupiers of premises where third parties are present at leisure, that include pubs, clubs, sporting venues, markets, hotels, shopping centers, markets, and resorts.
Product Liability Insurance:
For many countries and organizations, the product liability insurance is not mandatory. According to the UK Consumer Protection Act 1987 and the EC Directive on Product Liability, the insurance is required by certain companies involved in manufacturing and supplying goods. This insurance protects the insurer from the claims of injuries to customers due to the insurer’s products. It is also being protected from the damage of their property and claims of the defective products.
Employer Liability Insurance:
It is a type of liability insurance that may be imposed on an employer when an employee is injured during the course of employment. Employer liability is also termed as worker’s compensation and it is a compulsory form of liability insurance coverage that all organizations and businesses should carry.
General Liability Insurance:
This policy covers most of the public and product liability risks. These risks may include property damage or body injuries caused by direct or indirect actions of the insured company.
Directors and Officers Liability Insurance:
This insurance policy covers acts or omissions of those in the positions of a director or officer in a company. The whole company may not be responsible for the actions, statements, failures which are responsibilities of a director or officer. The problems under these issues are covered in directors and officers liability insurance.
Professional Liability Insurance:
It is given to professionals and experts of a company of any field against any claims.