The Straight Skinny on Liability Insurance in Georgia
Liability insurance is coverage that provides protection against claims resulting from injuries and damage to people and property.
Liability insurance protects the owner of the policy against liability, and offers financial compensation to people who are harmed by the policy owner’s negligence.
Who Has Liability Insurance in Georgia?
Liability insurance is essential for those who may be held legally liable for the injuries of others. Physicians and many business owners must have policies in place to do business.
A common type of liability insurance is auto liability insurance. These policies cover the costs of the other driver’s property and bodily injuries if you’re found at fault in an auto accident. Typically, when you have liability insurance and you’re found at fault, your insurance company will pay the costs for the other driver’s damaged car up to your covered policy limit. The state requires those who drive motor vehicles to purchase and maintain a minimum level of insurance coverage.
What Are the Different Kinds of Liability Insurance in Georgia?
There are several different types of liability insurance. Let’s take a look at them and why they’re needed, as well as who usually has which kind and what each type of policy generally covers.
Auto Liability Insurance
As mentioned above, this liability insurance protects a driver who causes injury to another person or damages their property while operating a motor vehicle. The two parts of automobile liability insurance are bodily injury liability and property damage liability. This type of insurance only covers injuries or damages to third parties and their property—not to the driver or the driver’s property.
Umbrella Insurance Policy
Also known as excess liability insurance, an umbrella insurance policy will usually cover the same things as home and automobile policies, as well as several other types of coverages. It includes protection from legal actions that arise when you’re driving in another country, as well as vandalism, invasion of privacy, and defamation of character. Umbrella coverage starts where the liability limits of a homeowner and auto policy leave off. It’s usually sold in increments of $1 million.
This is a policy that provides limits in excess of an underlying liability policy. In many instances, the underlying liability policy is an umbrella liability policy. An excess liability policy has the same breadth of coverage as the underlying liability policy and is designed only to provide a higher limit of insurance.
As you may know, homeowners insurance is for those individuals who own a home—whether it be a vacation cabin or a second home in retirement. If you have a mortgage, your lender will require you to purchase insurance for your home (“proof of insurance”). This is a type of property insurance that covers losses and damages to a person’s house and to their personal property in the home. A homeowners insurance policy also provides liability coverage for any accidents in the home or on the homeowner’s property.
Commercial General Liability (“CGL”) Insurance
This policy protects a business from claims that stem from bodily injury and property damage arising out of premises, operations, products, and completed operations. A CGL policy also covers the losses caused due to advertising and personal injury and includes protection for employees. CGL policies shield you and your company from out-of-court settlements, litigation, and judgments. And umbrella policy makes sense for those individuals with numerous assets or very expensive assets and are at significant risk for being sued. Some examples are landlords, those serving on non-profit boards, and youth sports coaches.
Professional Indemnity Insurance
This policy protects professionals and business owners, such as surgeons, doctors, architects, attorneys, and accountants when they are found at fault for misjudgment, errors and omissions, breach of duty or standard of care, or other types of malpractice.
Also known as insurance for insurers or stop-loss insurance, is the process of insurers moving some of the risk of their insureds to other parties. This is done to decrease the chances of paying an exceeding large claim. The insurance company diversifying its insurance portfolio is called the ceding party. The party that takes on a part of the potential obligation in exchange for a share of the insurance premium is known as the reinsurer. There are two types of reinsurance. Facultative reinsurance covers a single risk or a set of risks of the primary insurer’s clients. It’s more of a one-time deal, compared to the other type of reinsurance—treaty reinsurance—which is a long-term relationship. With treaty reinsurance, the reinsurance company takes on all of a particular type of risk from the ceding insurance company.
Georgia Insurance Lawyer
Liability insurance is critical for many individuals and organizations to perform duties or undertake actions in a responsible manner. With more than 40 million lawsuits filed every year in the United States and over one million licensed attorneys, there is the possibility of litigation around every corner. Protect yourself, your employees, and your company with the proper liability insurance coverage.
If you have questions about liability, policy limits, or insurance companies, please contact us. You can also visit the following pages for more information.