Personal injury liability insurance is an insurance product for people concerned about the potential need to pay damages in personal injury cases. When claims are filed against people who carry this kind of insurance, the insurance company will pay all or part of the damages, depending on the terms of the policy. In some regions, people are required to carry personal injury liability insurance to engage in certain activities, such as running a business or driving a car, in the interests of making sure that funds will be available to cover personal injuries associated with these activities.
While people may think of “personal injury” as an actual physical injury, and this is included in this type of insurance coverage, it also extends to damage to reputation, as might occur if someone was slandered. A business owner who spreads rumors about another business owner, for example, could be subject to personal injury liability if the other business suffers as a result of those rumors. Likewise, a driver who causes a crash is liable for injuries to the other driver.
Like other insurance products, personal injury liability insurance is highly variable and people can customize a policy to meet their needs. Generally, the policyholder is required to pay a premium, which is a flat fee that varies depending on the type of policy. The higher the risks of a payout, the higher the premium will be; a driver with a poor record, for example, will need to pay a high premium for car insurance. In addition, personal injury liability insurance usually comes with a deductible. The policyholder will be required to pay the deductible before benefits kick in.
Policies can also specify exceptions, or situations and events that will not be covered by the insurance. These exceptions should be read carefully to understand the policy in full and if people are confused, it is advisable to ask a representative of the insurance company for more information. It may be necessary to purchase additional coverage or to ask about other policy options to make sure the insurance needs will be met.
Judgments in personal injury cases can be very high. Business owners and employers are usually advised to buy personal injury liability insurance so they will be covered if employees or customers bring personal injury suits against them. Likewise, with drivers and people operating potentially dangerous businesses; while the premiums can be high, over time they are much less costly than paying damages out of pocket.