What Does Personal Liability Insurance Cover? Is It Worth Your Money?

What if someone else’s actions within your territory compel you to be held accountable for the same? Well, these mishaps might sound terrifying, but you certainly can’t deny the reality. So, why don’t you simply opt for personal liability insurance and live the rest of your life casually relaxing on your couch! 

Personal liability insurance also referred to as comprehensive personal liability insurance, is basically third party insurance.  Personal liability occurs when you’re held accountable for any accident that takes place inside or outside your house, such as property damage, bodily injury, and other unprecedented moves that you have no control over. It protects you and your family members against any claims of medical bills or the legal fees that a third party demands. You can avoid paying for those unforeseen events from your pocket, up to the insurance coverage limit.

So, just enjoy your cup of coffee and worry not!

When Exactly Do You Need Liability Insurance?

For a few moments, imagine that a guest who’s staying at your home fell down a broken stair. The guest has suffered a broken limb and sues you for liability which can be lakhs of rupees. That’s when you need personal liability insurance. Personal liability will help you pay the medical fees that are demanded and your legal defense fees depending upon your coverage limit.

Personal liability will also cover the accidents that occur outside your house. Imagine you are staying in a hotel and you accidentally drop a lit cigarette that has led to a fire accident. 

Now the hotel management can sue you for the damage and demand compensation. If you have taken personal liability insurance, it will help you cover those costs. 

Personal Liability Insurance At Work

The business’s insurance policy will cover the accidents that happen at work.

The employer of any organization should have public liability insurance. If any member of the organization or the employees has caused damage to any third party, public liability insurance will cover that. Self-employed public liability insurance will cover the losses if you are self-employed.

On the other hand, personal liability insurance will cover you from the losses caused by the following events up to your coverage limit:

  • Lawsuits against you, your organization or your family
  • Bodily injuries to any third-party individuals
  • Property damages that you are responsible for

But what if the policy limit does not cover your needs? Here’s where you need to consider additional policy coverage like Personal Umbrella Liability Insurance that will give you extra protection. It will help you cover the accidents that may exceed the policy limits.

Claims That Your Personal Liability Insurance Does Not Cover

  • Liabilities due to automobile accidents. You should have auto insurance that will provide coverage.
  • Property damages and bodily injuries are not accidental and are intentionally caused by you or your family.
  • Damages and injuries that you or your family suffers. (This kind of coverage comes under health insurance)
  • Claims that are due to your business activities

Is Personal Liability Insurance Necessary?

If you are living on your own then you are responsible for your actions. That is when personal liability insurance comes into play. You may often think that you have nothing to lose at the moment but, think for a while that if you are held responsible for damages then your future assets will be at risk. You could lose your home, investments, and properties that you hold now. Moreover, your future wages and investments will also be impacted when there are no existing assets. 

After all, it might also be the case that you are self-employed and have to take care of business expenses as well. So, who would cover your liabilities if something goes wrong unintentionally?

Additionally, if you are being wrongly accused of liability, and forced to face the court, liability coverage will provide you with legal representation and also cover the legal fees. As a matter of fact, in the past few years, the number of lawsuits has increased dramatically. Regardless of the assets that you hold, the risk of claims for liability is high.

The Final Blow Against The Big Demon!

While talking about insurance policies, personal liability coverage is the most understated one. Liability coverage primarily comes under residential policies as an added package, people take it for granted and focus mostly on the value for their properties.

The cost for personal liability insurance as low as the policies are based on the insured value of the property or building. Considering the minimal cost of the insurance coverage, it is recommended that you go for the maximum amount that is offered to you. You go through your needs with your respective insurance agent and policy provider who can guide you in choosing what is best for your status.

There are several kinds of personal liability insurance but the common function is that they cover not the damage to your property but that of the third party for which you are responsible for. 

Make sure that you completely review your home and other policies and have a clear knowledge of what is covered and what is not covered by your personal liability insurance. After all, your personal assets are not for charity!