Posts Tagged ‘liability cover’

Liability Cover To Protect You For Negligence

April 28th, 2014 Comments off

Liability cover is a kind of insurance cover. Any occurrence that a person is responsible for is called liability. Insurance promises compensation to an individual for unpredictable losses that may occur in the future. The individual makes fixed payments periodically for the promise. The firm that gives this kind of promise is known as insurer. The individual who pays for this promise is known as the cover holder.

There are many forms of insurance. Some are statutory while others are optional. A person seeking insurance chooses the type of insurance he requires. What he chooses is called insurance cover. When a person chooses a cover against liability he is covered against property damage or personal injury to a third party.

In this context, 3rd party refers to another person and not the policy holder. Therefore, any compensation for damage or injury is not paid to the cover holder. Compensation is made to the victim despite the fact that he is not the owner of the insurance contract.

Personal bodily injury in relation to a third person includes disability, injury among others. For instance if a person doing shopping in a mall skids and injury occurs to his leg, he can demand compensation from the mall’s owner. Property damage of a 3rd person involves loss or physical damage. For example if your vehicle knocks someone’s vehicle damaging it, the owner of the vehicle will demand to be compensated by you.

There are two ways in which liability insurance protects the covered person. Any court cases against him are settled by this policy. In case of a court awarding compensation to a third party, all the compensation money is paid by this cover. The cover pays up to the limit stated by the policy.

Many countries require those who risk being sued by third parties for negligence to take liability insurance cover. These people include drivers of vehicles, manufacturers, constructors and employers. The activities they engage in put other people at risk of loss or injury. The law requires them to be covered against liability so that if anything happens, money will be readily available to compensate the affected people.

Liability cover is optional. However, home owners, business owners and other people could give it a thought. People are increasingly discovering their civil rights. Being taken to court for negligence is therefore easy. Although it is not possible to stop or predict risks, transferring them to an insurance company can be more comforting.

Liability cover and income protection redundancy are sometimes mandated by law, but may also be optional. Protect yourself against future losses by reviewing and managing your insurance coverage prudently.