Liability insurance essentially protects the insured from the claims of a third party that are usually initiated as a result of negligence by the insured. This is done by the insurance company to help mitigate the costs of large settlements against a client.

Public Liability

This is a form of liability insurance often purchased by companies and corporations to defend themselves against any claims made by the private individuals who have been harmed by the actions of the company or corporation.

Product Liability

This form of liability insurance defends a company from any claims made by individuals as a result of faulty products. The higher the risk of a faulty, dangerous product, such as with cars, the higher the premiums for the product liability insurance.

Employee Liability

Employee liability insurance is purchased by employers to protect themselves against the claims of a worker if one of them is injured on the job site or through the performance of their required duties.

Variance

Which type of liability insurance is required by an entity changes a great deal from state to state and from country to country. There is a subfield of lawyers that dedicates careers to understanding and explaining the requirements of liability insurance to companies.

Directors and Officers Liability

This form of liability insurance is intended to protect the officers and directors of an entity from legal claims made against them as a result of faulty decision-making.

Source:

Healthcare Providers Insurance Organization

Small Business

Resource:

State Farm