What Is Liability Insurance?

Definition of Liability Insurance

Liability insurance covers the policyholder against risks, such as lawsuits, that arise from persons being injured or property being damaged. Under a homeowners insurance policy, liability insurance protects you if a visitor to your home injures themselves on your property. If you’re running a business, it can protect against incidents such as a customer slipping on a sidewalk outside of your store. In auto insurance, drivers are required to have a minimum amount of liability insurance as many situations involving liability can arise from collisions.

Liability Insurance protects policyholders from risks beyond their control.


Mrs. Mapplethorp runs a spa that offers various services to clients. One day as a client is leaving, she slips and falls on Mrs. Mapplethorp’s steps leading to the front door. Even though Mrs. Mapplethorp attends quickly to the situation and makes sure the client is fine, the client sues her with a “slip and fall” lawsuit. Luckily, Mrs. Mapplethorp’s business insurance helps her defend the case without a major impact to her bottom line.

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Liability Tips from First Foundation

Liability and Business

Liability risks can be very severe in a business and corporate setting. Business insurance can provide coverage for the liability risks to persons and property, and for liabilities that may be present under the terms of a contract.. For this reason, it is very important to work with an experienced business insurance broker to work out the areas of liability that are present in your business and the insurance you need to protect yourself.

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Last updated Feb 11, 2019