Business, Legal & Accounting Glossary
Liability insurance is a form of protection against claims of loss or injury, for which a policy owner might be otherwise responsible. In other terms, liability insurance indemnifies acts that are legally deemed negligent and may result in various damages. Liability insurance is often a mandatory form of insurance coverage for many professionals. As such, liability insurance extends to medical and legal fields in a form of malpractice insurance. Liability insurance may also apply to manufacturers of consumer goods, and is known as product liability. The primary purpose of liability insurance is to safeguard the policyholder from lawsuits and third party claims. Liability insurance was first introduced in transportation to protect motorists and vehicle owners in cases of car accidents.
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This glossary post was last updated: 10th February, 2020