What is Liability Insurance?
Definition of Liability: The state of being legally responsible for something: the state of being liable for something.
In the event that you are “liable” or responsible for the cause of injuries to others, liability insurance will protect you from resultant lawsuits. A person or business can be liable to another party due to negligence, the law or statute, or through a contract. It is sometimes called “Third Party” coverage. Liability insurance protects you for any damage you cause to a “third party”.
General Liability Insurance
All businesses need a Commercial General Liability policy. Having liability insurance is like having an attorney on retainer.
Professional Liability Insurance
Professional Liability Insurance sometimes called Errors and Omissions Insurance (E&O) or Malpractice Insurance protects individuals against claims made by clients for professional mistakes or negligent actions.
The type of Professional Liability Insurance you need depends on the kind of work you do. Malpractice coverage for a doctor is significantly different than coverage for accountants, real estate agents, financial advisors and lawyers.
If you are a professional, particularly an independent contractor, you should have Professional Liability Insurance.