Part A: Liability Coverage
Liability coverage protects you by paying a third-party for property damage or injuries which you were legally responsible for causing.
It also includes any defense costs that were incurred up to the limit of liability.
Most policies have single or splil limits of liability. To see how they work, review Slide 2.
Policyholders work with agents to determine what coverage limit to select. The higher the protection, the more premium the insured will pay for that coverage on an annual basis.
Liability coverage can be the most important part of the policy, because if you are negligent for damages and you are not properly protected, the injured party can legally pursue you and your assets for recovery.
The key point here is that liability coverage does not pay the policyholder or their family members - it pays the other people involved in the accident. If the policyholder is hurt, they can use their Medical Payments coverage for help. We will talk more about that coverage in another lesson.