The Importance of Liability Insurance

The term liability describes when someone takes responsibility or accountability for something. It’s expected that we take responsibility for our choices and actions. Among the many uncertainties of life, accidents happen. To ensure that we stay liable for those accidents, we have liability insurance. There are different types such as:

  • General
  • Professional
  • Property damage
  • Bodily damage

General Liability Insurance

Although not required by law, General Liability Insurance benefits businesses. Small business owners should have some form of it to handle potential lawsuits. General liability includes personal and advertising injury, medical payments, and bodily and property damage liability.

Personal and Advertising Injury

Not all injuries are physical. Personal injury covers any malicious verbal or written communication. If a competitor spreads false claims that cause a decrease in customers, the business owner can sue. Today people can harm a business with the click of a mouse and a bad review.  The reputation of your business warrants defense.

Medical Payments

The coverage amount covers a customer’s injuries that happen on business property. If the medical expenses surpass the coverage amount, the business owner handles the difference.

Bodily Injury and Property Damage

Bodily Injury Insurance covers the business in the event of a slip and fall or another non-employee involved incident.

Professional Liability Insurance

The next type of liability insurance is professional liability insurance. This type of insurance covers mistakes that happen or are believed to have happened. The Professional Liability Insurance only covers claims of negligence, misrepresentation, and inaccurate advice. It’s more of a specific type of insurance because of its limitations.

For example, when a catering business fails to deliver a specific order or let a customer know about their specific services, insurance covers the financial burden brought on the customer. If the business undergoes a lawsuit for negligence, the insurance protects the business.

The same goes for a real estate agency that is not thorough when selecting potential properties. Customers rely on businesses for accurate information to make the appropriate decision. If not acquired, the insurance can cover such a claim protecting the business.

Property Damage and Bodily Injury Liability Insurance

Property damage and bodily damage liability insurance describe car insurance. Every driver should have it. In the United States and Canada, drivers must have these types of insurance. 

Bodily injury handles the medical expenses of the injured party of an accident. Property damage comes into use for damaged property as a result of an accident. In the US, the minimum coverage required per state ranges from $10,000-$25,000. Advisors usually urge customers to buy about $100,000 per person. If not, the out-of-pocket payments will add up.

In Canada, since legal costs and lawsuits have increased, coverage should be around $1,000,000. If you drive cross-country, carpool, or drive for a business, it’s recommended to carry an even higher coverage.

Canadian car liability insurance does not cover:

  • Damage caused to a vehicle because you hit an animal or object
  • Hit and run
  • Damage as a result of natural disasters
  • Vandalism
  • Theft


When thinking of protecting your business or vehicle, there are many companies that provide insurance options.  Liability insurance can cover everything from small businesses to drivers on the road. Being accountable today can cost a fortune, but being responsible can lessen such a burden. Protect yourselves with liability insurance. Why not look here?

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