Liability Insurance

Liability insurance provides financial coverage for a homeowner against the risk that a person is injured on the property through an event that is covered in the policy. If a person is visiting the property as a guest, the homeowner is considered responsible for that person's safety while that person is a guest. The homeowner has the duty to keep that person safe, so choosing the right carrier and finding a proper liability insurance policy is important.

The homeowner pays a premium to the insurance company and, in the event that a suit is filed the insurance carrier will, if it finds the claim justified, cover the medical costs of the injured person and other expenses that might come up. The company also pays the legal expenses of the insured person.

If the person sustains injury by accident, or as a result of some negligence on the part of the homeowner, then the homeowner is liable for damages. If, for example, the homeowner has a pool, it is emptied, and there are no fences or barriers and no signs indicating that the pool is empty. The homeowner will be liable for damages should an invited guest fall in and be injured. It would be considered an accident unless it could be proven that the guest had known beforehand that it was empty and fell nonetheless. It could also be seen to be negligence on the part of the homeowner if he or she failed to inform the guest that the pool was out of commission.

Liability insurance coverage most generally refers to the legal action that might be taken against a homeowner, the person insured. Sometimes when a person sustains loss or injury on the property of another, they will sue for damages of varying sorts. They might sue for extended medical expenses, for pain and suffering, for loss of income or other damages. When this happens, the insurance will pay the legal costs of the insured person whatever they might turn out to be. However, the coverage for the other matters will be limited to the maximum limit of the homeowner's insurance policy.

Third Party Coverage

Liability insurance is sometimes referred to as third party insurance. This means that the monies are not paid to the person who is insured, but to another person, the third party, the person who sustained the injury or loss.

Liability insurance does not generally cover contractors on a property. Persons working on the property must carry their own injury insurance since they are actually at their place of work. They are not eligible for the homeowners coverage since they would, technically, be at their place of work. The homeowner's property is their offsite work place, and they are therefore still governed by the employer's and workmen's compensation agreements that they carry.

Liability coverage also does not cover intentional damage. Under the terms of a standard form homeowners policy, the insurer will reimburse a property owner for malicious and willful damage to his or her property from someone else. However, if it can be proven that an injured person had intentionally caused the injury there will be no compensation.

If the homeowner, also, were to intentionally trash his or her property the insurance carrier, if it could prove this to be so, will not provide financial compensation for the repairs.

There is the classic tale of the property owner who sets fire to his property and files a claim with his insurance company expecting a financial windfall. The insurance company investigates, as they are wont to do, and finds out that the fire was intentionally set. In cases such as these, the insurance carrier will always refuse to pay the claim.

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