What is a Liability Policy?

Broadly, a liability insurance policy provides a source of recovery for a third party who or which is injured or sustains monetary damages due to the negligent act or omission of the insured. The corollary is that a liability inurance policy provides protection to the insured for the risk of financial loss to a third party as a result of the insured's negligence. Assuming that tje damages sustained by the third-party results from a covered cause of loss, the policy will answer for the damages which would otherwise payable by the insured, up to the coverage limit. That is, there may be some amount that the insurer will not pay if that amount exceeds the policy limits.

Another very important benefit of a liability policy is that if the insured is sued for an occurrence that is covered by the policy, the insurer will hire a lawyer, at its own expense, to defend the insured, and will pay costs related to that defense. In some forms of liability policies, such as professional liability policies (those issued to physicians, lawyers and some other categories of professionals), the amount paid by the insurer toward the conduct of the defense reduces the amount available for the indemnity payment.

A Commercial General Liability Policy protects you and your business from third party bodily injury or property damage claims for which you may be held liable.