If life insurance is related to a person then liability insurance is related to a person's profession. Whether you run your own practice or you are employed by a small, medium or large sized firm, it is imperative for you to have liability insurance in order to cover any risk involved in your profession. This type insurance policy coverage offers protection from claims that arise due to any injuries or damage caused to a third party or his property. If the person who is liable to another for the damage caused due to duty negligence or misrepresentation will lose his personal assets, if he is not insured. When employed by a firm or a company, the reputation of the individual as well as the company gets affected. When a claim is made against an employee, the loss gets transferred to the company for any damages or injuries caused to a third party or his property.

For liability insurance, the premium amount and coverage policies differ from one profession to another as the level of risk involved may be minor or severe. Due to increasing number of claims made, your business or profession being properly insured has become essential. Legal fees as well as compensation or settlement money is so expensive that only liability insurance can save a businessman or a profession from bankruptcy. The nature of work in every business varies and sometimes it is so dangerous that it can even take away some one's life. Visitors, customers, employees, sub contractors and vendors are at risk. Sometimes, small size firms may not be in a sound financial position to buy liability insurance but in the event of a claim the sudden expenses incurred can exceed the premium cost.

The various types of liability insurance are professional liability, general liability, D&O liability and employer liability. General liability is the most common insurance policy where coverage includes physical damage caused to customers, vendors, sub contractors etc and the damages can occur due to the activities of the employees. General liability insurance covers injuries and damages caused to a third party and his property. Professional liability insurance is meant for doctors, attorneys, accountants etc where they can be sued for malpractice. Healthcare providers such as doctors, dentists, therapists should buy medical malpractice insurance whereas attorneys buy legal malpractice insurance.

The other type of liability insurance is D&O insurance which stands for Directors and Officers. The activities of an officer or a higher official such as a director are covered under this type of policy. The reason could be duty negligence, violation of good faith etc. Every business needs to carry employer liability insurance. Employees will file a lawsuit if any bodily injuries are caused by working in the premises of the company. Certain employees are exposed to greater risks due to their job profile in which cases it becomes mandatory for the company to buy such an insurance coverage. The main purpose of these insurance policies is to minimize the loss to an extent of the amount covered in the policy.