What types of damages are covered in liability insurance?

Liability insurance covers a wide range of damages that may be incurred when someone is legally liable for a loss or injury. Liability insurance covers compensatory damages, which are meant to reimburse a victim for a financial loss. It also covers special damages, which are meant to reimburse the victim for specific items such as lost wages, medical bills, or property damage. In Indiana, liability insurance may also be used to cover punitive damages, which are awarded to punish a wrongdoer for intentional or reckless behavior. Punitive damages can be used to deter similar behavior from others by setting an example. In addition, liability insurance can be used to cover legal fees for an insured party who is found liable for a loss or injury. It may also cover the costs of defending the insured party in a lawsuit. Finally, liability insurance may cover the cost of settlements if an insured party is found liable for a claim and reaches an agreement with a victim outside of court.

Related FAQs

What is the difference between first-party and third-party insurance claims?
What are the requirements for insurance fraud investigation?
How do claims adjusters decide on the amount of coverage for an insurance policy?
What are the penalties for not paying an insurance premium?
What is the difference between an insurance policy and a bond?
What types of life insurance are available?
What are the different types of insurance policies?
What types of insurance coverage do I need?
What is the difference between a contract and an insurance policy?
What is the process for appealing an insurance claim denial?

What types of damages are covered in liability insurance?

Related FAQs

Related Blog Posts