What Is Liability Coverage?
Liability coverage protects you against financial loss in the event you are in an accident involving your owned or leased commercial vehicle and are found to be responsible for the injuries to others involved. Liability coverage has two components—bodily injury coverage and property damage coverage.
The Bodily Injury (BI) portion of your liability coverage will pay for the related expenses if you cause an accident that injures or even kills another person. These expenses include hospital, medical bills, rehabilitation, long-term care, funeral expenses, loss of earnings, pain and suffering, and other expenses.
The Physical Damage (PD) portion of your liability coverage will pay for the expenses connected to the damage incurred to another person’s property. These expenses could be the repair or replacement costs of damaged items. These can include another vehicle, houses, lamp posts, street signs, fire hydrants, etc.
Liability insurance will also pay for any legal defense costs you may incur should you be sued because of your involvement in an accident.
Who Needs Liability Insurance and How Does It Work?
All drivers need liability insurance. Liability insurance is required by law.
Liability insurance requires you to set limits. These limits come in two flavors—split limits and combined single limits (CSL). Let’s look at these limits more closely.
Split limits are defined by three numbers such as $50,000/$100,000/$25,000.
Combined Single Limits (CSL), on the other hand, are represented by a single number such as $1,000,000. In this case, $1 million is the maximum an insurer will pay for all injuries or damages sustained in an accident.
What else do I need to know about liability coverage?
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