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The Importance of Liability Insurance The responsibilities of adulthood range from maintaining a home and job, to keeping yourself fed, clean, and clothed. Many adults own things like homes, cars, and large recreational toys. By law, many of these items require that they be insured against damage, and more specifically, state laws require a minimum liability insurance against damage that may be inflicted on another person or their personal property. Liability is a very important part of your insurance policy. It has been described as, “a part of the general insurance system of risk financing to protect the purchaser (the “insured”) from the risks of liabilities imposed by lawsuits and similar claims.”

The Role of Liability Insurance in Business Liability insurance is intended to protect the insured from the out of pocket expenses for damage to another person’s property or person or in the event that the insured is sued. For a business, this means that your business is insured, covered, and able to recover from the expenses incurred if a claim or suit is laid against the owner or business. While business liability insurance policies come with a steep price tag, the cost of settling a suit or a claim out of pocket could potentially put you and your company into bankruptcy. Additionally, as an employer, many businesses take out liability insurance to cover the cost of any claims laid against the company for coverage if an employee is injured or otherwise disabled during the course of employment. Commonly referred to as ‘worker’s compensation insurance’, this type of coverage enables an employer to cover the cost of recovery and/or compensation without completely losing everything to the claim.

The Role of Liability Insurance for the Individual On an individual level, liability insurance can save you from endless headaches and unmanageable out-of-pocket costs if claims or suits are ever laid against you. Most homeowners, auto, and other private insurance policies include state mandated liability coverage minimums. Liability insurance policies for automobiles, motorcycles, and other motorized toys and vehicles will pay for damages and injuries for anyone and anything you or your vehicle injure


or damage as the result of an accident. Let’s take a look at an example. Say you’re running late to work, and you’re trying to find a parking spot. Frustrated, you end up parking at the back of the lot at the highest point of the inclined lot. At lunch you decide you want to leave and grab some food so you walk outside. A group of people are milling around several cars in the lot and you glance to where you left your car, heart sinking. Your car is not where you left it. Walking to the group, you think back, unable to remember engaging the parking brake. Sure enough, when you get to the group of people, your car has rolled down the parking lot and slammed into a couple cars. Your liability insurance is designed to pay for the damages inflicted on the other vehicles as well as any injuries that may have occurred. Similarly, your homeowner’s insurance will cover the cost of any injuries or damage that happens on your property. Or for instance, if a tree limb from your yard falls and damages a neighbor’s house or fence. Whether you’re looking for auto, homeowner’s, or affordable health insurance in Utah, Altius has what you need. It only takes a few minutes to protect yourself and your family from the potentially crippling financial burden of out of pocket payments for damages or injuries that you are liable for. Photo Credit: 401(K)2012, Mike Bitzenhofer


The importance of liability insurance