Liability Insurance
Definition of "Liability insurance"
Liability Insurance is a type of coverage present in Home Insurance as well as other fields of insurance.
In Real Estate, Liability Insurance refers to coverage protecting the insured from legal claims enforced by third-parties. For instance: if someone gets hurt inside your house and sues you for it (remember, this is America…) it will be the Liability Insurance portion of your Homeowner’s Insurance policy that will determine if you are covered or not for the legal and medical expenses that person will claim against you.
Typically people settle for Liability Insurance of up to $100,000. However, it’s a better idea to go with the $300,000 option, even if your house is not that big, as medical and legal bills are expensive and can eat that value fast. Remember, safety is not exactly related to the size of your house. It’s not just the pool area with the trampolines that can lead to accidents. A rusty nail, a glass door or a wet floor can do the trick and you don’t want to get caught on the bitter end of bills; better not to save when choosing the amount of your Liability Insurance coverage.
Liability Insurance coverage is even more important when we're talking about Commercial Real Estate. Imagine your clients or your employees having an accident on your premises! Knock on wood!
Real Estate Tip:
A great way to avoid liabilities is to seek professional help. Find a real estate agent to get protected through your home buying process!
Popular Insurance Terms
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Same as term Compulsory Insurance: coverage required by the laws of a particular state. For example, many states stipulate minimum amounts of automobile liability insurance that must be ...
Charge against a business firm in a product liability insurance lawsuit. Manufacturers have been held responsible for their products. When consumers become injured while operating a ...
Correction of a contract containing a mistake in order to prevent a party to that contract from gaining from that mistake. For example, if $1,000,000, instead of the correct amount of ...
Written notice to an insured showing date of termination of an insurance policy. ...
Agreement concerning an insured individual, not the insured's property. A property and casualty insurance contract cannot be assigned, since it follows the insured, not the property. For ...
Measurement of how people feel about prevailing economic conditions, employment outlook, and personal finances. This index is based on statistics gathered from questionnaires mailed by the ...
Initial reserve plus the terminal reserve divided by two for any year of valuation. ...
Pension plan funding instrument in which contributions paid by an employer are deposited to accumulate at interest. (These plans are usually noncontributory.) Upon retirement, an immediate ...
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