No matter what you're doing in life -- whether you're running a business, driving a rental car or even traveling -- you may come across the need to purchase limited liability insurance. This type of insurance is actually a broad category that covers a wide variety of insurance policies that limit the amount you can collect, often in exchange for paying a smaller premium up front.
A common type of limited liability insurance is specifically for businesses. It's limited according to either the size of your business or your role. For example, if you're buying the insurance for yourself and you only own 20 percent of the business, the insurance might only compensate you for 20 percent of damages. Or if you're buying the insurance because your business is small, then the maximum amount you'll be compensated might be limited based on size. You can attach riders to the insurance to further cover your role in the business, such as personal injury or property damage coverage.
Rental car companies also offer a form of limited liability insurance for drivers. In typical cases, the insurance covers instances when the rental car driver is at fault. It provides limited coverage for bodily injuries to third parties and property damage to other cars and their contents. The insurance is limited because it does not cover any damage to the rental car itself or damage to the driver or passengers.
Some vacation rental homes and hotels give renters an option to purchase limited liability insurance to cover any damages that might happen during their stay. The insurance is limited to a maximum amount and if the renter accidentally causes any damages above that amount, the renter will be responsible for those. Insurance policies like these may require that the renter tells management about property damage in order to have the damage covered.
Trucking companies also take part in limited liability insurance options for their drivers. Drivers are typically only covered when they are driving trucks for job-related activities, such as when they are pulling a load, making the need for additional coverage a necessity. Limited liability options will cover the 18-wheelers during other times, like when drivers are taking the trucks to be washed or getting them repaired.
- Creatas/Creatas/Getty Images
- Definition of Property & Casualty Insurance
- Stacked Vs. Non-Stacked Car Insurance
- Can a Landlord Require Renters Insurance?
- What Is the Difference Between Property & General Liability Insurance?
- Does Full-Coverage Car Insurance Pay for Dents & Scratches?
- Do Rottweilers Raise Homeowner's Insurance?
- What Is an Insurance Certificate Holder?
- How Does a Car Insurance Deductible Work?