What is LIABILITY INSURANCE ? What does LIABILITY INSURANCE mean ?  LIABILITY INSURANCE meaning ?

What is LIABILITY INSURANCE ? What does LIABILITY INSURANCE mean ?  LIABILITY INSURANCE meaning ?

Liability insurance is 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 it protects the insured in the event he or she is sued for claims that come within the coverage of the insurance policy originally individual companies that faced a common peril formed a group and created a self-help fund out of which to pay compensation should any member incur loss in other words a mutual insurance arrangement the modern system relies on dedicated carriers usually for profit to offer protection against specified perils in consideration of a premium liability insurance is designed to offer specific

protection against third party insurance claims that is payment is not typically made to the insured but rather to someone suffering loss who is not a party to the insurance contract in general damage caused intentionally as well as contractual liability are not covered under liability insurance policies when a claim is made the insurance carrier has the duty and right to defend the insured the legal costs of a defense normally do not affect policy limits unless the policy expressly states otherwise this default rule is useful because defense costs tend to soar when cases go to trial in many

cases the defense portion of the policy is actually more valuable than the insurance as in complicated cases the cost of defending the case might be more than the amount being claimed especially in so-called nuisance cases where there is no liability but the case has to be defended anyway commercial liability is an important segment for the insurance industry with premium income of 160 billion US dollars in 2013 it counted for 10% of global non-life premiums of 1,550 billion US dollars or 23 percent of the global commercial

lines premiums liability insurance is far more prevalent in the advanced than emerging markets the advanced markets accounted for 93 percent of global liability premiums in 2013 while their share of global non-life premiums was 79 percent the u.s. is by far the largest market with 51 percent of the global liability premiums written in 2013 this is due to the size of the US economy and high penetration of liability insurance 0.5% of GDP in 2013 US businesses spent

84 billion u.s. dollars on commercial liability covers of which 50 billion u.s. dollars was on general liability including 12 billion US dollars for errors and omissions E&O and 5.4 billion u.s. dollars for directors and officers Deedle US businesses spent another 13 billion u.s. dollars all in the liability portion of commercial multi-peril policies 9.5 billion u.s. dollars for medical malpractice and 3

billion u.s. dollars for product liability covers the UK is the world's second largest market for liability insurance with nine point nine billion u.s. dollars of liability premiums in 2013 the largest sub line of business is public and product liability this is followed by professional indemnity and employer's liability cover for employment related accidents and illnesses there has been a significant shift in the sub segments of UK liability insurance in the last decade the share of professional indemnity has increased from about 14 percent to 32 percent highlighting the shift towards

and more services driven economy manufacturing meanwhile comprises a lower share of liability claims as accidents related to injuries and property damages have declined in continental Europe rgeous liability insurance markets are Germany France Italy and Spain together they made up almost 22 billion US dollars of global liability premiums in 2013 typically governed by civil law systems these markets rely on local conditions and historical experience to determine which liability policies and covers are available penetration ranges from 0.16 percent to 0.25 percent which is low compared to the common law

countries such as the u.s. the UK and Australia Japan and Australia are the largest markets in the asia-pacific region with commercial liability premiums of 6 billion US dollars and 4.8 billion u.s. dollars respectively in 2013 at 0.12 percent of GDP the penetration of liability insurance in Japan is much lower than in other advanced economies in Australia penetration is much higher at 0.32 percent of GDP this is due to the country's English law derived legal

framework which has increased demand for employers liability insurance Australia has mandatory covers for aviation maritime oil pollution and residential construction and in certain states for medical practitioners property brokers and stockbrokers liability insurance premiums have grown at an average annual rate of 11% since 2000 China is the ninth largest commercial liability market globally with premiums of 3.5 billion u.s. dollars in 2013 and strong annual average growth of 22% since 2000 however penetration remains low and 0.04 percent of GDP growth has been driven by increasing risk awareness and regulatory changes you