Houston Business Insurance

Liability Insurance

Liability insurance is a part of the general insurance system of risk financing to protect the purchaser (the "insured") from the risks of liabilities imposed by lawsuits and similar claims. It protects the insured in the event he or she is sued for claims that come within the coverage of the insurance policy. Originally, individuals or companies that faced a common peril, formed a group and created a self-help fund out of which to pay compensation should any member incur loss (in other words, a mutual insurance arrangement). The modern system relies on dedicated carriers, usually for-profit, to offer protection against specified perils in consideration of a premium. Liability insurance is designed to offer specific protection against third party claims, i.e., payment is not typically made to the insured, but rather to someone suffering loss who is not a party to the insurance contract. In general, damage caused intentionally as well as contractual liability are not covered under liability insurance policies. When a claim is made, the insurance carrier has the duty (and right) to defend the insured. The legal costs of a defense normally do not affect policy limits unless the policy expressly states otherwise; this default rule is useful because defense costs tend to soar when cases go to trial.

General Liability

Many of the public and product liability risks are often covered together under a general liability policy. These risks may include bodily injury or property damage caused by direct or indirect actions of the insured.

In the United States, general liability insurance coverage most often appears in the Commercial General Liability policies obtained by businesses.

What Liability Insurance Provides

Liability Insurers have two major duties: the duty to defend and the duty to indemnify.

The duty to defend is triggered when the insured is sued and in turn "tenders" defense of the claim to its liability insurer. Usually this is done by sending a copy of the complaint along with a cover letter referencing the relevant insurance policy or policies and demanding an immediate defense.

The insurer may decide that there is no coverage under the policy and deny the claim (meaning that its insured must defend itself), defend the case unconditionally, or defend only under a reservation of rights. The last means that the insurer reserves the right to withdraw from defending in the event that it turns out the claim is not covered and to recover from the insured any funds expended to date. If the insurer chooses to defend, it may either defend the claim with its own in-house lawyers (where allowed), or give the claim to an outside law firm on a "panel" of preferred firms which have negotiated a standard fee schedule with the insurer in exchange for a regular flow of work. The decision to defend under a reservation of rights must be undertaken with extreme caution in jurisdictions where the insured has a right to Cumis counsel.

The duty to indemnify means the duty to pay "all sums" for which the insured is held liable, up to a set policy limit.

In some jurisdictions, there is a third duty, the duty to settle a reasonably clear claim against the insured so that the insured is not hit with a judgment in excess of policy limits. An insurer who breaches any of these three duties may be held liable for the tort of insurance bad faithin addition to breach of contract.

About HIG - Henrich Insurance Group

Welcome to HIG - Henrich Insurance Group, a full-service independent insurance agency providing solutions, service and satisfaction for individuals, families and businesses. We work for you. Our team of caring professionals is here for you, to represent your interests and to reduce your workload and costs. As an independent agency, we are not limited to any one company. We have relationships with many respected carriers so that we can offer you the best combination of price, coverage and service. Our strong commitment to our clients is caring, personal service providing the right coverage at the right price.

We have been providing professional service with a personal touch since 1991. We strive to maintain a high standard of excellence in all that we do and to establish a firm relationship of mutual trust and service with you.

We represent over 50 of the top rated carriers in Texas — including Travelers, Safeco, Progressive, Republic, Universal and many more — to accommodate all your insurance needs.

Call us today at (713) 349-0400 to get a Free Houston business insurance quote . Use any of our convenient forms from the customer service tab above to service your policy directly from your home or office.