Is Your Liability Insurance Coverage Adequate?

Living in such a litigious society brings many risks for both individuals and businesses alike. In addition to the insurance we are required to carry such as automobile insurance and homeowners insurance, a policy for general liability insurance is equally as important. Liability insurance is a type of insurance which protects an individual’s or a business’s assets if sued for monetary damages in the event of personal injury or property damage. If you have already purchased liability insurance, you may be wondering: Is your liability insurance coverage adequate?

Factors to Consider

When deciding on the amount of liability insurance coverage you need, there are a few important factors you need to consider. If you are a business, consider the amount of risk associated with your business. For example, if you are a bar owner, you have a higher risk of incidents than someone who may own an upholstery company. Another factor to consider is the state in which you live. As some states have a history of awarding higher amounts of legal settlements than others, you may need to carry higher amounts of coverage. Be sure to ask your insurance agent for guidance in this regard. Check into an umbrella liability insurance policy which is a type of liability coverage which picks up where your other insurance coverage ends.

Understanding the coverage limits of your liability insurance policy is an important step in determining whether your coverage is adequate. While a policy which covers $1 million per claim may seem like a lot of insurance coverage, it is not uncommon for legal settlements to be in excess of this amount so make sure you do your research and purchase the best coverage you can afford.

Business Liability Insurance

If you own a business, you will need to have more liability insurance coverage than an individual. When you purchase a Business Owner’s Policy, you have the option to bundle liability insurance as an add-on, which is the most common choice. Unfortunately, this option typically provides low coverage limits which may not be adequate for all business owners.

Personal Liability Insurance

While your auto and homeowners insurance policies do provide some liability coverage, it is not always adequate to cover the damages caused in an accident. Purchasing an additional personal liability insurance policy is the most effective way to protect you from being held liable to pay out of pocket for a legal settlement. For a relatively small premium, you can be protected with millions of dollars worth of coverage.

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