Liability insurance coverage is a specialized form of business insurance that provides protection against claims resulting from injuries and damage to other people or property. It is designed to cover the legal liabilities of the policyholder in the incidents or events covered by the policy. Most vehicle and property insurance policies, including auto and homeowners insurance, come with standard liability coverage. Generally, general liability only covers any unprofessional negligent act, that is, negligence that is not related to the provision of professional or expert services. In addition, employer liability may cover claims filed against a company if it is determined that they were negligent in industries exempt from workers' compensation insurance.
Policies generally cover liability for errors and omissions, negligent acts and misrepresentations. Corporate liability insurance, on the other hand, protects the financial interests of companies and business owners against lawsuits or damages resulting from similar accidents, but it also extends to product defects, recalls, etc. Business owners can purchase liability insurance that covers them if an employee is injured during business operations. Intentional damages and contractual liabilities are generally not covered by liability insurance policies. The policy language includes public liability coverage or coverage associated with a standalone PLI policy. Liability insurance does not cover intentional or criminal acts, even if the insured is declared legally responsible.
A supplemental insurance policy is additional liability insurance coverage that is purchased and exceeds the dollar limits of the insured's current insurance for homeowners, cars, or boats. As with any contrast between two different types of insurance policies, there are strengths and weaknesses associated with PLI and GLI. While commercial general liability insurance protects against most legal problems, it does not protect directors and officers from being sued, nor does it protect the insured against errors or omissions. However, retroactive liability insurance is insurance that covers a claim that occurred before the insurance policy was purchased.
