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5 Things You Must Know About Liability Health Insurance Policy

There are various types of liability insurance plans in India. By buying a liability insurance plan, you can protect your business. There are policies to protect individuals from various risks including negligence and injury. If you buy a liability health insurance policy for your employee, your business interests are protected. You can save legal payouts as they will be borne by the insurance company. If the policyholder is responsible for the damage, the insurance company will take care of those expenses in a very efficient manner. Hence, the policyholder will have great peace of mind and legal battles are avoided.

What is the Liability Insurance Plan?

Insurance companies design various kinds of policies based on the needs of customers. Life insurance plans and health insurance plans are quite common. A life insurance plan will cover the risk associated with the life. A health insurance plan will cover the hospitalization against various kinds of sicknesses, diseases and injuries.

If you commit damage to the third party without your knowledge, you will want to pay compensation to the third party. Sometimes, the damage will be too heavy that it is difficult to incur out of pocket expenses. In that scenario, the risk will be borne by the insurance company in a very efficient way in the form of ‘liability insurance plan’.

Purpose of Liability Insurance Plan

The purpose of the liability insurance policy is to protect the interests of businesses and individuals against the third party liability. A third party may sue the business for negligence. Malpractice or injury due to the negligence of the policyholder may be challenged in a court of law. The insurance company will deal with those issues which are covered by the liability insurance plan and the payout will be made to the third party directly. If there is a claim against the ‘liability insurance plan, the financial benefit will not be made to the policyholder but to the third party.

Things that you should know

You should be aware of the following 5 things before buying a liability health insurance plan:

1. What is the Liability Health Insurance Plan?

The liability health insurance plan focuses on the damage or deterioration of the health due to the negligence of the policyholder. There will be physical pain, loss of work, loss of health and many other direct or indirect losses which take place through the event. A liability health insurance plan will repay the costs associated with the loss of health due to injury or sickness.

If you buy motorbike insurance, it is mandatory to buy third-party liability plan. If you buy a comprehensive plan, the liability clause will be included in the plan.

Indemnification of the policyholder - If the third-party sues the policyholder, the insurance company will indemnify the policyholder.

2. The Working Mechanism of a Liability Insurance Plan

As you buy the liability insurance plan, you should be aware of the working mechanism of the policy. You should be aware of the coverage amount, the documents, FIR and criminal tribunal procedures to make use of the insurance plan in a very efficient manner.

  • Application Form - the victim has the right to make an application against the vehicle owner. If you are the owner of the property, you may be sued by the third-party. A legal heir can make a claim on behalf of the deceased person (who died due to your negligence).
  • FIR - The third-party should register a complaint at the nearest police station. The FIR (First Information Register) should be registered as per the information shared by the third-party. It is an important document based on which the insurance company will verify other details and the insurance claim will be processed quickly. To file a police complaint successfully, you should be aware of the registration number of the vehicle involved in the accident. The other details that should be entered in the complaint include driving license number, photos & videos (if any) and the name and contact details of witnesses.
  • Coverage - The limit on coverage will not be fixed while buying the insurance policy. The insurance company will make the payment to the third party as per the terms and conditions of the policy and in accordance with the court ruling.
  • Submission of Documents - The third-party should submit various documents as per the ‘list of documents’ specified by the insurance company. The documents should include the original FIR and original bills of expenses incurred after the accident.

3. Coverage of the Plan

When you buy the ‘liability insurance plan’, you should be aware of the coverage offered by the insurance plans. You should be aware of the inclusions and exclusions of the plan.

The following aspects are covered by a standard insurance plan:

  • Death of the third-party
  • Bodily injury of the third-party
  • Permanent disability of the third-party

4. Exclusions of the Insurance Policy

It is very much important that you should be aware of the exclusions of the insurance policy.

  • Own Damage - The third party liability insurance plan will not cover the damage of the policyholder’s vehicle or property
  • Claim Frequency - The policy cannot be claimed more than once in a policy year. Hence, the third-party should file the claim by including all the bills and information that pertains to the incident or accident.
  • Maximum Compensation - The maximum compensation paid by the insurance company is capped at Rs. 7.5 lakhs. If the expenses are higher than Rs. 7.5 lakh, it should be borne by the third-party.
  • Should Oblige the Terms and Conditions - The third party should oblige the terms and conditions of the insurance policy. If the third-party fails to produce required information or documents, the insurance claim may be delayed or rejected.

5. To whom and when should you File the Claim?

The third-party should be aware of the location and the party that should be approached to file the insurance claim.

As per the motor vehicle’s act, the third-party should approach the tribunal which is in the purview of the mishap. It should be the place of the residence of the owner of the vehicle as well. The location should also match with the driver’s residence or the injured person’s ordinary place of living.

Benefits of a Liability Insurance Plan

  • Third Party Liability - if the third party injures due to your negligence, the insurance plan will protect you. If a customer falls by walking on a wet floor or your business premises, you are liable to pay the damages. If the person is hospitalized, the insurance company will pay the bills.
  • Lawsuit Protection - Even though you have not committed a fault, you will get help by buying the insurance policy. If the third party files a lawsuit, you will get protection. Professional liability insurance will help in defending your business. You can cut down out of pocket expenses.
  • Protection from Dropped Cases - In some cases, the third party will file a case against you or your business and the case may be dropped later. The case may be dropped before reaching the trial stage. However, you will incur losses in terms of time, effort and money. These losses will be borne by the insurance company.
  • Employee Coverage - as you expand your business, you might include new employees. The information should be shared with the insurance company so that new employees will also be covered by the insurance policy.

Insurance Companies Offering liability Insurance in India

There are many general insurance companies offering liability insurance in India. You can go through the following plans to understand the features and the best policy can be subscribed as per your needs:

HDFC Ergo Commercial General Liability Plan

The general liability plan introduced by HDFC Ergo will cover some risk factors which were not available in the past 10 years. The plan will fill the gaps which were not possible with a standard insurance policy.

  • Protection of Bodily Injury - The plan will protect the policyholder against the bodily injury or property damage. If the business entity is found liable for the personal injury to the third party, the insurance company will make the payout to the third party.
  • Separate Aggregate Limit - The insurance policy offers separate advertising limit and personal injury limit so that the policyholder will enjoy additional benefits.
  • Personal Injury Coverage - The personal injury coverage includes discrimination, segregation or harassment
  • Bodily Injury Coverage - The bodily injury coverage includes mental anguish, mental injury, humiliation and shock which are due to the physical injury.
  • Extensions - Sudden and accidental pollution, medical expenses coverage and other risks can be subscribed as per the policyholder’s needs

Bharti AXA Commercial General Liability Policy

The insurance policy is designed to provide comprehensive coverage against the following risks:

  • Bodily Injuries - The bodily injuries or death that takes place due to the negligence of the employer will be borne by the insurance company. The compensation will be paid by the insurance company as per the terms and conditions mentioned in the policy contract.
  • Medical Payments - The medical payments should be done by the employer if there is a risk to the health of the employee or the third party. The hospitalization charges will be paid by the insurance company.

The liability exposure against various kinds of business operations can be covered with a single policy. If a business entity is having branches at various geographical, it is possible to subscribe to a comprehensive policy so that the business interests are protected very efficiently.

TATA AIG Casualty General Liability Insurance

The simple slip and fall accidents will lead to expensive medical bills which should be borne by the business entity. The insurance company will come to your rescue by offering a comprehensive insurance policy against various kinds of third-party liabilities.

The liability arising out of the operations of the business will be met by the insurance company.

  • Bodily Injury and Property Damage - The expected and intended injuries are excluded from the policy. They can be subscribed by paying an additional premium. The bodily injuries and death of the third party will be covered by the insurance policy. The business entity should inform the insurance company as soon as the risk takes place.
  • Personal and Advertising Injury - The personal injury including the mental impact on the third party will be covered by the insurance policy.
  • Medical Expenses - Medical expenses incurred in offering the treatment or recovery of the third party will be borne by the insurance company.

New India Assurance Public Liability Insurance

The injury or damage to persons while conducting business operations should be covered prominently. The business is responsible for the damage of other party property or person. The liability can be covered by a comprehensive insurance policy.

  • Coverage of Incidents on the Premises - The insurance policy covers the incidents that occur on the premises.
  • Cost of Claims Made by the Public - The claims made by the public will be very expensive. If there are incidents which are connected to your business, they should be covered prominently.
  • Compensation against personal injuries
  • Compensation against death
  • Compensation for loss/damage to property

Other Types of Liability Policies

There are other types of liability policies which can be selected as per the type of business.

  • Medical Malpractice Liability - It is a professional liability insurance plan which can protect the interests of doctors and physicians. The liability insurance plan can be subscribed by dentists, nurses, etc.
  • Professional Indemnity - The insurance plan covers individuals and companies. The errors and omissions committed by professionals will be covered by the policy.
  • Product Liability Insurance - If a business produces or supplies products, the harm caused due to the usage of the products should be borne by the business. The insurance cover protects risk against accidental death, bodily injuries and other risk factors.

Conclusion

Liability insurance plan gives protection for professionals and businesses against various kinds of risk factors. The insurance company will bear the expenses as per the contract and third-party claims will not affect your business.