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
Same as term Credit Card Insurance: coverage under a homeowners insurance policy in the event that a credit card is fraudulently used or altered. Fraud includes theft and the unauthorized ...
Legislation that provides support for legal actions against individuals or organizations involved in systematic illegal activities. This act has been applied against insurance organizations ...
Property valued according to its earnings potential. However, property insurance contracts generally indemnify an insured on a replacement cost less physical depreciation and obsolescence ...
Means of setting life insurance reserves based on expected mortality rates as reflected in a mortality table. ...
Model state law of the NAIC that requires that the insurance company and agent provide a prospective insured with written information concerning the cost and benefits of the life insurance ...
Hospital charges in addition to room and board. Miscellaneous expenses are covered under a basic hospital plan, with the limits of coverage expressed either as a multiple of the daily ...
Average earned monthly income (AEMI) for the tax year in which the insured wage earner has income interrupted or terminated because of illness, sickness, or accident. This AEMI is important ...
Agreement that eliminates tariffs among the United States, Canada, and Mexico over a 15-year period. Approximately 65% of United States agricultural and industrial exports would be eligible ...
Combination of several policies with each adding an additional layer or limit of coverage above the limits of the policy that comes before it. For example, Policy A adds $100,000, then ...
Have a question or comment?
We're here to help.