The necessity for insurance today is paramount, and this is due to the fact that we live in an economically uncertain world and one never knows when financial help is required. Insurance acts as a safety blanket and protects customers from various issues that may arise. Insurance plans are of various types based on the requirement. The most commonly acquired policies are Life Insurance policies, Health Insurance Policies, among others.
However, there are other insurance policies that are quite specific in nature and correspond to certain unique requirements. These types of policies are procured by customers who require cover only for certain issues and not for generic ones, life life and health. One of these is the Liability Insurance.
Liability insurance is a policy that offers protection to businesses and individuals from risk that they may be held legally or sued for negligence, malpractice or injury. This insurance policy protects the insured from legal payouts and costs for which the policyholder is deemed to be responsible. However, contractual liabilities and intentional damage are usually not covered as part of this policy.
This policy was originally created by companies or individuals who experienced common risks and hence created a fund to help pay for each other's issues regarding this. These policies offer cover against their party claims as the payment will not be for the insured to the person who has been affected by the damage caused. In case a claim is made then the policy provider will have to defend the policyholder.
This type of an insurance policy is generally procured by companies or individuals who may be held liable, legally for injuries or other issues. This especially the case for hospitals, doctors or even business owners. An example would be, if a product manufacturer sells products that have been faulty or causes damage to other's products, then he/she may be sued for the damages caused. Procuring a liability insurance will cover the manufacturer from ensuing legal costs.
Liability insurance is one part of the general insurance policy itself under the risk transference category. In many countries, liability insurance is mandatory especially for drivers of public transport vehicles. The scope of this form of insurance in India has been defined by the Public Liability Insurance Act of 1991.
There are number of liability insurance policies available for customers based on their line of work and requirements. The most common forms of Liability insurance are Public,Product, Employers and Third-party liability.
There are a number of companies within India that provide different forms of liability insurance covers. Some of these are -
The claims process varies from one company to the other. There is generally a form to be filled for the same post which all necessary documents will have to be provided. However, when it comes to liabilities it is not as simple. There may be court cases or an out-of-court settlement. The claims process will be different based on what the claim is being made for.
Liability insurance is a policy that offers cover to businesses/individuals and companies in case of legal hassles and if they are sued due to harm caused to another person by their products and services.
Intentional damage and contractual liabilities are not covered by a liabilities insurance policy.
There are a number of liabilities insurance policy available. These include third party liability, public liability, product liability, employer liability, professional liabilities, industrial risks and so on.
Among others, ICICI Lombard and Bharti AXA provide customers with a liabilities insurance, among others.
Yes, chartered accounts can avail a liabilities insurance. They will have to avail a professional liability insurance.
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