Liability Insurance for Nonprofits

Liability Insurance for Nonprofits

Liability insurance developed from the need to protect one's assets. Decades ago liability protection was not covered by insurance companies. If an individual, nonprofits or business needed to pay compensation for an error, they needed to dig into their own pockets to do so, often to the detriment of all involved.

Modern day liability insurance keeps families and businesses afloat amid everyday risks. Risk is often a necessary factor in day-to-day life. It is naïve to believe that anyone could avoid taking on risk in order to complete their day. For example, you may need to drive to the grocery store to buy food. There's a risk that you may get in an accident, but that risk usually won't interfere with dinner--you'll drive to the market anyway.

Liability Insurance in a Nut Shell

In the event of an accident, there are several steps anybody can take to protect themselves from a third party claim. Third party claims occur when a person feels wronged by an individual, business or product. That individual or business can be held liable for that wrong if insurance companies and quite possibly a court rule in such a way.

The person wronged can take that claim to their own insurance company, or they can file a civil suit in a court of law. Liability trials rarely make it past the civil courts, as it's easier to pay a settlement than go through a lengthy trial process--especially if it's likely that one will be found liable in their particular case.

If a person takes the claim to their insurance company, your own insurance company will contact you to decide what action to take, based on the type of liability coverage you have. You may not have to pay a dime. It all comes down to how much you protect yourself or your business from the risk involved in carrying out your goals and aspirations.

Liability Insurance Breakdown

While many individuals or businesses may not need a full liability coverage plan, most need some form of liability in order to carry out their daily routines. There are many different liability plans designed to protect an individual or business from litigation. These include personal, professional, product, or general insurance coverage. Each deals with a specific facet of liability insurance.

Unless you're going into business, chances are you'll take on very little liability insurance over your lifetime. You can take out personal and automobile coverage, in the event that you cause damage to other people, property or the environment in which your live. This protects you from losing your assets if you are found liable.

If you have a business, chances are that the liability is much higher, and you'll be required to furnish some form of compensation should something go wrong. This is often required by local laws, and it's important to check out the hard facts of what is and isn't required by your state or local government before opening up shop.