Liability Insurance protects you from paying out of pocket for anyone who suffers injury or death near or in your home or place of business. You can purchase Liability insurance on your own or as part of a business, auto, contents or home insurance policy.
Liability insurance also protects you from
claims by trespassers. Believe it or not, this can include burglars
who are injured during the course of robbing you at your business
or home! It can also protect you against accidents that may befall
passers by, such as a fall on an icy sidewalk and accidents that
occur during the renovation or repair of your building. If members
of the public or customers regularly visit your premises, then you
should definitely think about taking out public liability insurance.
This is also true of homes that attract curiosity seekers or children
seeking a swim in your pool.
Liability insurance allows you to pay any
compensation awarded to the injured party as well as any fees or
expenses that you might incur during the legal process.
The cost of the premiums depend on the type
of business home, vehicle or property that you own, the area you
live in, as well as the number of employees you have. If you work
from home, public liability insurance is also a good idea.
The cost of your individual insurance is typically worked out with
the assistance of an insurance broker. The insurance broker uses
a book rating to determine your potential costs. This is calculated
using a base rate, which includes the insurer's costs of serving
businesses that are the same or similar to yours. If insuring the
cost of your type of activity or business has proven to be expensive
for the insurance company in the past, then the cost of your liability
insurance is going to be higher.
The insurance broker will also calculate
your premium according to an estimate of the level of risk attached
to your particular business. The cost of your premium will also
be affected by the number of insurance claims you have made before
and your approach to risk management. The safer your home, vehicle
or business, the less you are likely to be charged for your premiums.
If you are applying for employers' liability
insurance, the exposure risk is assessed based on the number of
employees you have and the size of the payroll. For public and products'
liability the exposure risk is based on how well you sell and such
factors as whether you work away from your premises. For instance,
the owners of a school that teaches horseback riding are probably
going to pay higher premiums for liability insurance than a store
that sells soft pillows.
There are many conditions, exclusions and
warranties that can be applied to liability insurance policies.
It is therefore important that you discuss with your insurance adviser
any issues that pertain to your life that are applicable to your
policy. A good broker will be able to advise you of the best type
of liability insurance for you.