Everything you want to know about

Liability Cover

What is Liability Insurance?

Liability Insurance is what protects and safeguards businessmen from falling prey to the liability that their company has. This type of insurance is availed to an amount equal to the liability of the company so that when the time comes, the company is safe as well as the policy holder’s personal assets.

Liability Insurance is aimed at mainly covering the individual that runs the business from liabilities that the company is held responsible for and to keep him/her in safe zone in troubled times. Liability insurance covers secure the assets of the company and the individual running the company from being claimed for liabilities. Taru Financial Services insists that our patrons give more importance to liability cover on the individual (businessman) more than the stocks. This type of insurance covers cost for legal proceedings as well as payments, which the insured is held responsible for.

Liability insurance covers payments of damages occurred only when he/she is legally found to be guilty. Liability insurance doesn’t cover contractual liabilities and intentional damages.

Why does anybody need Liability Insurance?

Liability insurance is most significant and also commonly availed by people of the business class who might be held accountable for damages caused to others, especially businessmen.

For instance, a manufacturer will buy a liability insurance for his products just in case his products turn out to be faulty or becomes a reason to harm or cause damage to the consumers or any other third party for that matter. Businessmen usually avail liability insurance to cover damages caused to any of the employees during business operations or services.

What are the different types of Liability Insurance?

Liabilities can pop up from anywhere and businessmen are vulnerable to charges from a range of liabilities. All these liabilities can subject the assets of the businessman to substantial claims. Protecting the assets is a very important task and every business man should have in place a well- structured asset protection liability insurance. The following are few important types of liability insurance.

  • Employer’s liability and workers’ compensation
    This type of insurance is mandatory for businesses to protect the company from liabilities arising from either any injury or the death of an employee.
  • Product Liability Insurance
    This type of insurance is for those companies that are involved in manufacturing products and selling them in the market. Product Liability Insurance protects the company from lawsuits from either injury or death due to the consumption of the said company’s products.
  • Director and liability coverage
    This is a type of insurance for those companies with a board of directors or authorities, in which the insurance protects them from getting into trouble when the company is sued. The corporation, by default, provides some basic protection to the directors and other important officers, few companies choose to avail this insurance cover to give them more protection.
  • Umbrella liability policy
    This type of liability is a personal kind of policy designed to protect the policy holder against catastrophic losses. In most cases, coverage of umbrella liability policy comes into play when coverage of all other insurance policies are reached.
  • Commercial liability insurance
    – This is a very standard policy that protects the employer and the company from lawsuits accusing them for the injury or death of either the public or employees. This policy also covers property damage by an employee of the company and harm caused by the negligence in service offered by the employees. This type of insurance also covers infringement on intellectual property.

What are the three different kinds of liabilities?

  • Public liability
    This type of insurance policies covers an individual person, a company, an event or a businessman. It also covers a community building, from the costs incurred from liabilities caused by causing damage or injury or death to a person or property. If a person owns a business, the individual or the company is subject to legal lawsuit against the damage caused by them, be it either injury or death to another individual or property. With liability insurance, these liabilities claims can be fended off easily without actually disturbing the person’s personal assets.
  • Professional Indemnity
    This type of liability insurance covers an individual or company in cases where the person or company offers advice or services to consumers and they incur loss or damage in any way. Professional indemnity protects you from lawsuits filed against the person or the company by somebody who has suffered a loss by receiving your service. Medical profession will have specific medical indemnity insurance policies as basic requirement for their licensing and registration.
  • Product liability
    If a company if manufacturing, selling or distributing products, it needs this form of liability insurance cover to protect itself from being sued for damage, injury or death caused by the consumption of those products. This insurance cover is very important for businessmen because it might come up from anywhere and anytime.

How Taru Financial Services will help you with liability cover?

Property that a businessman own is his personal asset but at times of hardship, it becomes a liability. Usually, when the company is in trouble, the employer tends to compromise on his personal assets to keep the company floating but that’s not the correct solution. Taru Financial Services will guide you to create a liability cover which keeps the personal property safe and uses the liability cover in case of need.

Case Study

When a businessman finds himself in a situation where he/she has a liability to the company’s account for about Rs. 60 lakhs. These liabilities can come up from various sources like damage to other person or property by consumption of the policy holder’s product or service. When the company’s assets amount up to only Rs. 80 lakhs, the insurance provider insures the company for the remaining Rs. 20 lakhs which bridges the gap between the total asset value and liability.

This secures the safety and future of the company and makes sure it functions smoothly no matter what and also gives the owner of the company the monetary support to meet any liability with this amount instead of risking his personal assets that he/she had earned with a lot of hard work. It is common tendency for businessmen for letting go of their personal assets to make up for the losses and suffer losses to a great extent that few were not even left with a roof above their heads. Liability Cover puts you in the sweet spot where the liability is met, the company is safe and running and also the personal assets of the businessman is still within his control and not lost to liability.