Hand placing wooden block representing liability protections on a stack of insurance assets.

What is Liability? Understanding Insurance and Risk

When looking at insurance – almost any type of insurance – you’ll see the word liability. It’s at the core of what insurance is for, the paying of costs incurred by the policyholder that is covered under the policy – that’s what liability is: something a person (or company) owes another. But what does it mean in the context of common insurance? And what does it mean to the larger concept of risk in insurance? Today we’re going to answer these questions, including some helpful examples.

The Relation of Risk and Liability

It’s important to understand that liability can also mean a legal or regulatory risk or obligation. When it comes to the risks that insurance protects against, liability generally refers to being found legally liable. When someone comes onto your property, there is a risk that they may be injured – such as slipping and falling on an icy surface. If this occurs, that’s potentially a legal liability – a debt you might owe to them to pay medical bills or other costs, which they can obligate you through a lawsuit.

Understanding Liability in Insurance

This is where insurance comes into play, covering you for those legal costs and paying those expenses. This is why most insurance policies you have – such as home insurance, car insurance, and business insurance – provide liability protections as a core component of the policy. While liability coverage provides protection, it is important to review your policies with your agent to better understand how it works and what limits might apply. Let’s look at some examples for more details:

  • A Guest Injures Themselves at Your Home: If a guest slips and falls on your iced driveway this holiday season, and you’re found liable, the liability coverage may help pay for their related medical expenses or your legal expenses in the lawsuit. Learn more about improving your home’s coverage.
  • You Get into a Car Accident: Hopefully, it’s a small fender-bender, but all the activity after an accident, from pictures of your car to police statements, is about finding who is at fault. The various parts of your car insurance will then kick in, such as bodily injury and property damage. Learn more about car insurance in MA.
  • An Employee is Injured on the Job: We all want a safe and accident-free workplace, but it’s not always possible. In Massachusetts, workers compensation insurance is mandatory for businesses, covers medical costs, and provides disability benefits for work-related injuries and illnesses.

As mentioned above, it’s important to talk to your insurance agent about your current policies, their limits (the maximum amount of money paid out for a covered claim), and any liability gaps you might have in coverage. At Safeside Insurance, we’ve been helping homeowners, car owners, and business owners navigate policies and claims for over 30 years. Learn how we help them get the Right Insurance for the Right Price and contact us today!

Get a Quote


Safeside Insurance Agency

Office: (508) 753-8862
Fax: 508-797-3564
Email: info@safesideagency.com

59 Green Street
Worcester, MA 01604

Business Hours
Mon - Thurs: 10:00 AM – 4:00 PM
Friday: 10:00 AM – 2:00 PM
Sat & Sun: Closed

©2024 Safeside Insurance, Inc.
Privacy PolicyTerms & Conditions

We’re here to help you find the gaps in your coverage, the best policies to fit your needs, and bundles that help you protect even more for less. Not sure where to get started? Contact us or start a quote!