What types of damages are covered in liability insurance?

Liability insurance is designed to protect individuals and businesses from potential legal losses incurred from civil lawsuits. Liability insurance will cover a range of damages depending on the type of policy held. Common types of damages that are covered under liability insurance include compensatory damages, which are designed to restore an injured party to the same condition they were in before the injury or accident; consequential damages, which are intended to cover losses that are not directly related to the injury or accident; and punitive damages, which are awarded to the injured party to punish a wrongdoer for malicious actions. In addition to the above damages, liability insurance may also cover attorney’s fees, court costs, and settlement payments. In California, liability insurance is not required to be held by individuals and businesses, but it is highly recommended as a means of financial protection. Liability insurance for businesses is governed by the California Insurance Code, which provides guidelines for the types of coverage that shall be included in business insurance policies. It is important for individuals and businesses to understand the types of damages that are covered under their liability policy before purchasing a policy. Having a clear understanding of the types of damages covered by the policy will ensure that policyholders are adequately protected from legal losses in the event of an accident or injury.

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What types of damages are covered in liability insurance?

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