subject: Why Liability Insurance Clauses Are Important [print this page] Home insurance is something most home owners have. It's a type of insurance that protects your house against many different problems. If there's a fire, a flood, a burglary, all these things can cost money, and typically people will get an insurance policy that covers the value of their things. Even if you rent an apartment, you may have $30,000 worth of items inside of it, in which case you can get an insurance policy to cover that amount. However, many insurance policies have what's called a liability insurance clause. This is a critical part of the contract that's too often forgotten. Let's see why liability insurance clauses are important.
Let's say someone breaks into your home, and steals your TV. That means you've lost a TV, which may have been worth $500. Your homeowners insurance may cover that, and you may be able to recover the $500. If not, then that amount is not that much money, and you could eventually afford another one. But what happens if the thief comes in, then trips on your kid's toy that was left on the ground? He could injure himself, perhaps seriously, or at least he could claim that he injured himself seriously. In our very litigious society, he could then sue you for millions in damage. If he can prove that he indeed suffered the damage because of negligence on your part, he could win, and you would have to pay him millions, even though he was trying to steal from you, and the toy was left in your own home. These cases happen all the time.
What a liability insurance clause covers are cases like that. That's also why these clauses specify an amount much higher than the value of your items. Even though you may only have a few thousand dollars worth of gear, the liability may be for a million or two. This is to cover potential lawsuits in cases like these. Normally, these clauses can be added very easily, and the supplement is very small, because the chance of that happening is not that high. But these things do happen, which is why the liability clauses are offered. Also, if you own a building, or any location where members of the public are expected to go, then they become even more important. You may not get someone tripping on a toy in your own home, but if you're the owner of a day care center, then there could be parents coming in every day, and then the chance goes way up.
Overall, there's no need to worry too much about these things happening. But it's good to know the risks, and whether or not you're covered against them. It's far too easy for a crook to claim he suffered permanent injuries because of negligence on your part, especially if you are responsible for places that you know others will frequent. That's why liability clauses are important in home insurance contracts.
by: Casey Trillbar
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