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
Funds paid by an insurance company associated with the normal costs of doing business other than the costs of claims payments. ...
Act that makes the liability cost for cleanup joint and several. Even if a party is only partially responsible for losses inflicted, that party may be liable for the payment of the total ...
Management philosophy developed by W. Edwards Deming, the thesis of which is the continuous improvement in quality through research in customer satisfaction and the empowerment of ...
Authority of states to tax the insurance companies they regulate. States levy income taxes, real and personal property taxes, and special levies, the most important of which is a premium ...
Crime against the state for which an officer of the state can bring legal action. Society is harmed by an individual breaking the laws of the state. Usually there is no statue of ...
Insurance for which premiums are charged according to the size of the face amount of the policy, so that the greater the face amount, the lower the cost per $1000 unit of insurance. ...
Securities that derive their value from other financial instruments that are used by the insurance company to hedge its bets on which direction the market is moving. For example, cattle ...
Same as term Occurrence Basis: coverage, in liability insurance, for harm suffered by others because of events occurring while a policy is in force, regardless of when a claim is actually ...
transfer of money from or an employer-sponsored pension or other qualified plan into an INDIVIDUAL RETIREMENT ACCOUNT (IRA) with out paying tax on the distribution. transfer of money from ...
Have a question or comment?
We're here to help.