A moment of negligence can produce a lawsuit seeking years of earnings. Liability insurance covers sums the insured becomes legally obligated to pay as damages for bodily injury, property damage, or other specified harms, plus the cost of defending against such claims.

General liability, auto liability, professional liability, and umbrella policies are common forms. Coverage is typically triggered by an occurrence or by a claim made during the policy period, depending on the form. Exclusions carve out intentional acts, contractual assumptions, and other exposures handled elsewhere.

Limits should reflect the insured’s assets and the potential severity of claims in the relevant jurisdiction. Defense costs may be inside or outside the limit. Prompt notice of claims and cooperation with the insurer are standard conditions. Liability insurance is a cornerstone of both personal and commercial risk management.

• Coverage for legal liability to third parties
• Includes defense costs as well as damages
• Written in multiple specialized forms
• Limits should match exposure and assets