The liability insurance business industry could save the life of your company. Insurance for business owners, especially insurance for small businesses, can become taxing after awhile. You need insurance for everything. But no one makes you delve into the liability insurance business. That being said, it is still incredibly important.
Here is some insurance news for you, the liability insurance business can be your life-saver. And with reasonably low insurance rates for it, liability insurance is the first optional necessity you should consider. But how much do you actually know about it? Read on for a little insight.
- What Is It?
- Where Did It Come From?
- What About Today?
Liability insurance falls under the category of general insurance in risk financing. It protects the purchaser from any liabilities that may be imposed because of lawsuits and similar claims. Those claims must be stated in the coverage, however. It is not a blanket coverage. When a claim is made, the insurance carrier then defends the insured.
This type of insurance was first inspired by individuals or companies that faced a common risk, and therefore formed a group that created a self-help fund, from which compensation would be pulled should one of the members face lawsuit. It was a mutual insurance agreement that any of them would get use of the money if needed, so it was to the benefit of everyone to put some money in for the greater good of the group.
Today the system relies on dedicated carriers to collect and distribute the money, because so many people and companies are putting in to the same pile of money. This insurance is designed to protect against third party insurance claims. Meaning that the payment is not made to the insured, but to the person making the suit against the insured. It skips the step of the insured having to pay out, and then be reimbursed. Typically, intentional damage and contractual liability are not covered under this insurance.
No one thinks that they will ever be sued. But there is no way to know. In this lawsuit happy culture that we live in, it may only be a matter of time. Protect yourself. Protect your business. Consider liability insurance.