Who Needs Liability Insurance?

The total value of B2C general liability insurance premiums written in the U.S. 2019 came to 5.7 billion U.S. dollars, according to Statista. It is expected that B2C general liability insurance premiums written by the insurance industry in the United States will approach roughly 6.64 billion U.S. dollars by 2024 including 1.4 billion U.S. dollars from premiums written online. These numbers make the United States the biggest insurance market in the world.

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What Is Liability Insurance?

Liability insurance also named third-party insurance protects the insured party from claims resulting from damage to other people and property. It protects the purchaser from the risks of liabilities such as legal costs and payouts within the coverage of the insurance policy. Liability insurance doesn’t cover contractual liabilities, intentional damage, and criminal prosecution. A beneficiary of liability insurance is a third party, not a policyholder.

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How Does Liability Insurance Work?

Liability insurance is essential for those who may be at fault for damage to someone else’s property or injuries sustained by other people. As liability insurance coverage policies protect both an insurant and the third party, it is called third-party insurance. Some types of liability coverage such as Auto Liability Insurance are mandatory in most states. People who drive a car, own a business, practice law or medicine may be sued for damage or injuries primarily decide to take out a liability insurance policy. A policy protects not only third parties who may be injured as a result of the policyholder's unintentional negligence but also the insured. Not only individuals but also businesses need liability insurance. 

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Who Needs Liability Insurance?

Vehicle owners/drivers

In most states, each vehicle owner needs to have automobile liability insurance under their automotive insurance policy to cover injury to other people and property in the event of accidents.

Product manufacturers 

A product manufacturer may buy product liability insurance to cover claims associated with product defects which caused harm such as injury or property damage to consumers. Manufacturers may avoid expenses related to claims and product lawsuits incident to faulty products. Carrying product liability insurance transfers all the risks of defects to the insurance company. 

Business owners

Business owners often decide to purchase general business liability insurance to be prepared for unexpected situations such as bodily injuries of customers, vendors, or employees and possible medical expenses, legal costs, or personal injury claims.


Doctors and surgeons have a very high level of responsibility at work so they mostly decide to take out liability insurance policies. The consequences of their decisions are typically very serious and influence other people’s lives so they are exposed to be sued.  


Lawyers need professional liability insurance which protects against cases when a client is harmed from a service or advice that they provide and for which they are held legally liable. Professional liability insurance is sometimes called malpractice insurance or errors and omissions insurance.  


Standard homeowners insurance policies usually provide personal liability protection for homeowners. Homeowner personal liability insures them against bodily or property damage of guests and uninvited people on the property or off-site. A homeowners liability insurance covers a homeowner against lawsuits for property damage or injury caused to other people by family members or even pets. The liability coverage in standard homeowners' policies pays both for the cost of the lawsuit and for any damages ruled by a court. 

Event organizers

Event organizers may be interested in carrying special event insurance which protects them against unexpected cancellation of the event, guest injury, or property damage during an event. Special event insurance, sometimes named as one-day event insurance, provides coverage of investment in a specific event, such as a wedding, conference, or trade fair. 

High-net-worth individuals

High-net-worth individuals’ lifestyle creates higher exposure to risk so affluent individuals try to protect their assets through purchasing personal liability insurance policies. Taking into account various risks and the type of assets affluent individuals have, they have special insurance needs.  

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