Liability Insurance: A Complete Guide (2024)
The different types of liability insurance are auto, commercial general, professional, and product liability. Most states require liability car insurance, starting at $50/mo, and you can get cheap coverage from Geico. Also, most businesses need commercial general liability insurance, costing around $400/mo.
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Dani Best
Licensed Insurance Producer
Dani Best has been a licensed insurance producer for nearly 10 years. Dani began her insurance career in a sales role with State Farm in 2014. During her time in sales, she graduated with her Bachelors in Psychology from Capella University and is currently earning her Masters in Marriage and Family Therapy. Since 2014, Dani has held and maintains licenses in Life, Disability, Property, and Casualt...
Licensed Insurance Producer
UPDATED: Sep 20, 2024
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Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.
UPDATED: Sep 20, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance company and cannot guarantee quotes from any single insurance company.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Liability insurance protects against financial loss from claims due to damages or injuries you cause
- Some examples of liability coverage include auto, commercial general, comprehensive general, professional, and personal liability umbrella insurance
- Liability car insurance coverage costs around $50 monthly, while commercial general liability insurance averages $400 monthly
Liability insurance is a policy type that covers legal fees and claim payouts resulting from damages or injuries you cause to a third party. There are several types of liability coverage. For example, professional liability insurance protects your business against negligence lawsuits, while liability insurance for a car pays for injuries and damages in an at-fault accident.
Keep reading our liability insurance guide to learn everything you need to know about finding the best business insurance and comparing liability coverage prices from the top companies. Then, enter your ZIP code above to compare general liability insurance quotes.
Different Types of Liability Insurance
The main types of liability insurance — liability car insurance, personal liability, and commercial liability — offer various financial protections for individuals and businesses.
Check out the table below to compare costs for commercial and personal liability insurance coverage:
Commercial vs. Personal Liability Insurance Monthly Rates
| Type of Liability Insurance | $100,000 Policy | $500,000 Policy | $1 Million Policy |
|---|---|---|---|
| Commercial Liability | $150 | $300 | $500 |
| Personal Liability | $30 | $50 | $70 |
For under $50 monthly, you can also get liability insurance covering your car. See how much you might pay for liability auto insurance coverage:
Liability Car Insurance Monthly Rates by Provider
| Company | Rates |
|---|---|
| Allstate | $85 |
| American Family | $79 |
| Farmers | $83 |
| Geico | $75 |
| Liberty Mutual | $87 |
| Nationwide | $81 |
| Progressive | $80 |
| State Farm | $82 |
| Travelers | $84 |
| USAA | $78 |
As you can see, Geico car insurance offers the best liability car insurance rates, averaging $75 monthly. However, prices vary by location, driving record, and demographics, so it’s important to compare liability insurance quotes for your car to know your exact cost.
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How Liability Insurance Works
Liability insurance pays for claims, settlements, and legal judgments when the insured causes harm, property damage, or injury to another party. You should consider liability insurance if you or your business face potential legal and financial claims due to injuries or damages, as it covers any costs if you’re found liable.
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For example, personal liabilities coverage through a home insurance policy would be helpful for a new homeowner in the event someone gets injured on their property and sues them. On the other hand, you’ll also need liability car insurance coverage to pay for other’s damages in at-fault accidents if you live in a state requiring it. Read on to learn what states require car insurance.
Examples of Liability Coverage
Various types of liability insurance coverages exist for your business, home, vehicle, or small business, including:
- Bodily injury
- Property damage
- Legal expenses from customer injury, personal injury, product liability, or professional liability
- Judgments and settlements
Consider the examples of liability coverage above and whether you or your business could be liable before buying coverage. For example, you’ll need commercial auto insurance if your business owns or uses vehicles.
Common Types of Commercial Liability Insurance
You can choose from various types of business insurance coverage listed in the table below:
Business Insurance: Breakdown of Important Coverage for Businesses
| Policy | Description |
|---|---|
| Business Owners Policy | Includes various types of business insurance and often tailored to specific business needs |
| Business Interruption Insurance | Provides compensation for lost income if a company cannot operate as usual due to a covered event like a fire |
| Commercial Auto Insurance | Protects company vehicles and drivers in the case of an accident or other vehicle damage |
| Commercial Property Insurance | Protects business property, including buildings and their contents, from fires, theft, and other perils |
| Data Breach Insurance | Covers a business in the event of data breaches where customer or company data is compromised |
| Directors & Officers Insurance | Protects directors and officers from personal losses if they are sued as a result of serving on a board of directors or as an officer |
| General Liability Insurance | Covers bodily injuries, property damage, advertising injuries, and reputational harm to third parties |
| Product Liability Insurance | Covers lawsuits related to damages caused by products sold or manufactured by a business |
| Professional Liability Insurance | Covers lawsuits related to services provided, often called Errors & Omissions insurance. Used often by professionals like doctors, lawyers, architects, etc |
| Workers' Compensation Insurance | Covers medical costs and partial wage replacement for employees who get injured or sick on the job |
An example of commercial liability coverage includes restaurant and bar business insurance. You can still find the best business insurance for your specific company by comparing quotes from the top insurers.
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Personal Liability vs. Professional Liability Insurance
Generally, liability insurance offers financial protection against damages you or your business cause. However, it’s important to understand the difference between the various liability coverages:
- Personal liability insurance: Personal liability, an extension of home insurance, covers damages or injuries you cause. Some condo and renters insurance policies also include personal liability coverage. Examples of claims for personal liabilities include property damage, medical bills, and legal expenses.
- Professional liability insurance: Professional liability insurance covers businesses sued for negligence or errors with services offered.
- General liability insurance: Commercial general liability insurance is a type of comprehensive coverage that covers bodily injury or property damage claims against your company.
It’s vital to know the difference between personal and professional liability insurance when shopping for a policy. While personal liability is good for homeowners, you might need professional or general liability coverage if you’re a business owner, accountant, doctor, or other professional worker.
You might also need professional or general liability insurance if you have a business at your home. Read more about home-based business insurance coverage.
Liability Car Insurance Requirements
You must meet your state’s liability car insurance coverage requirements to drive legally. Check out the table below to compare liability insurance requirements by state:
Liability Car Insurance Minimum Requirements by State
State Limits Coverages
Alabama 25/50/25 Bodily Injury & Property Damage Liability
Alaska 50/100/25 Bodily Injury & Property Damage Liability
Arizona 15/30/10 Bodily Injury & Property Damage Liability
Arkansas 25/50/25 Bodily Injury, Property Damage Liability, & Personal Injury Protection
California 15/30/5 Bodily Injury & Property Damage Liability
Colorado 25/50/15 Bodily Injury & Property Damage Liability
Connecticut 25/50/20 Bodily Injury, Property Damage Liability, & Uninsured Motorist
Delaware 25/50/10 Bodily Injury, Property Damage Liability, & Personal Injury Protection
District of Columbia 25/50/10 Bodily Injury, Property Damage Liability, & Uninsured Motorist
Florida 10/20/10 Property Damage Liability & Personal Injury Protection
Georgia 25/50/25 Bodily Injury & Property Damage Liability
Hawaii 20/40/10 Bodily Injury, Property Damage Liability, & Personal Injury Protection
Idaho 25/50/15 Bodily Injury & Property Damage Liability
Illinois 25/50/20 Bodily Injury, Property Damage Liability, & Uninsured Motorist
Indiana 25/50/25 Bodily Injury & Property Damage Liability
Iowa 20/40/15 Bodily Injury & Property Damage Liability
Kansas 25/50/25 Bodily Injury, Property Damage Liability, & Personal Injury Protection
Kentucky 25/50/25 Bodily Injury, Property Damage Liability, Personal Injury Protection, & Uninsured Motorist
Louisiana 15/30/25 Bodily Injury & Property Damage Liability
Maine 50/100/25 Bodily Injury, Property Damage Liability, Uninsured Motorist, & MedPay
Maryland 30/60/15 Bodily Injury, Property Damage Liability, Personal Injury Protection, & Uninsured Motorist
Massachusetts 20/40/5 Bodily Injury, Property Damage Liability, & Personal Injury Protection
Michigan 20/40/10 Bodily Injury, Property Damage Liability, & Personal Injury Protection
Minnesota 30/60/10 Bodily Injury, Property Damage Liability, Personal Injury Protection, & Uninsured Motorist
Mississippi 25/50/25 Bodily Injury & Property Damage Liability
Missouri 25/50/25 Bodily Injury, Property Damage Liability, & Uninsured Motorist
Montana 25/50/20 Bodily Injury & Property Damage Liability
Nebraska 25/50/25 Bodily Injury, Property Damage Liability, & Uninsured Motorist
Nevada 25/50/20 Bodily Injury & Property Damage Liability
New Hampshire 25/50/25 Financial Responsibility (None Required)
New Jersey 15/30/5 Bodily Injury, Property Damage Liability, Personal Injury Protection, & Uninsured Motorist
New Mexico 25/50/10 Bodily Injury & Property Damage Liability
New York 25/50/10 Bodily Injury, Property Damage Liability, Personal Injury Protection, & Uninsured Motorist
North Carolina 30/60/25 Bodily Injury, Property Damage Liability, & Uninsured Motorist
North Dakota 25/50/25 Bodily Injury, Property Damage Liability, Personal Injury Protection, & Uninsured Motorist
Ohio 25/50/25 Bodily Injury & Property Damage Liability
Oklahoma 25/50/25 Bodily Injury & Property Damage Liability
Oregon 25/50/20 Bodily Injury, Property Damage Liability, Personal Injury Protection, & Uninsured Motorist
Pennsylvania 15/30/5 Bodily Injury, Property Damage Liability, & Personal Injury Protection
Rhode Island 25/50/25 Bodily Injury & Property Damage Liability
South Carolina 25/50/25 Bodily Injury, Property Damage Liability, & Uninsured Motorist
South Dakota 25/50/25 Bodily Injury, Property Damage Liability, & Uninsured Motorist
Tennessee 25/50/15 Bodily Injury & Property Damage Liability
Texas 30/60/25 Bodily Injury, Property Damage Liability, & Personal Injury Protection
Utah 25/65/15 Bodily Injury, Property Damage Liability, & Personal Injury Protection
Vermont 25/50/10 Bodily Injury, Property Damage Liability, & Uninsured Motorist
Virginia 25/50/20 Bodily Injury, Property Damage Liability, & Uninsured Motorist
Washington 25/50/10 Bodily Injury & Property Damage Liability
West Virginia 25/50/25 Bodily Injury, Property Damage Liability, & Uninsured Motorist/
Wisconsin 25/50/10 Bodily Injury, Property Damage Liability, Uninsured Motorist, & MedPay
Wyoming 25/50/20 Bodily Injury & Property Damage Liability
As you can see, liability auto insurance is cheap, but you should consider full coverage car insurance for complete protection. In addition, your lender may require full coverage if you have a car loan or lease.
How to Buy Affordable Liability Insurance
Liability insurance costs under $50 monthly for your car, while general liability insurance quotes average $400 per month. However, you can find a cheap liability coverage price by shopping from the best companies.
Enter your ZIP code into our free quote comparison tool below to compare liability insurance quotes and search for the best business insurance in your area today.
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Frequently Asked Questions
What isn’t covered under a liability car insurance policy?
Liability car insurance coverage won’t pay for you or your passengers’ medical expenses. It also won’t pay for your vehicle repairs.
How can liability insurance protect you from financial loss?
Liability insurance covers claims, legal settlements, or judgments resulting from damages you cause.
How much liability insurance do I need?
You should carry at least the minimum liability car insurance coverage required in your state or more if you can afford it. With professional and general liability, consider your personal and business net worth before purchasing coverage.
What is the average cost of liability car insurance?
You can get a liability auto insurance policy for under $50 per month.
What does a liability insurance policy provide coverage for?
Liability insurance covers others’ medical bills and property repairs if you’re at fault.
What is the difference between liability coverage and full coverage?
Liability car insurance coverage pays for others’ injuries and damages after an accident you cause. Full coverage includes liability and also pays for your vehicle repairs and medical expenses.
Is liability insurance part of full coverage car insurance?
Yes, you must have liability insurance to get full coverage.
What is the 50/100/50 rule for liability car insurance?
Most states only require 25/50/25 in liability for bodily injury and property damage, but you should consider 50/100/50 for better limits if you can afford it.
What does it mean if the liability insurance coverage limits are $250,000/$500,000?
250/500/250 in liability car insurance coverage includes:
- $250,000 per person for bodily injury
- $500,000 per accident for bodily injury
- $250,000 per accident for property damage
What are the two types of professional liability insurance?
The two types of professional liability insurance coverages are claims made and occurrence. A claims-made policy means it must be active to cover a claim in that coverage period, while occurrence coverage is for an event that occurred during coverage.
What does professional liability insurance not cover?
Your professional liability policy won’t cover bodily injury or property damage since they’re general liability insurance claims.
Do I need liability insurance for my business?
While you don’t need business coverage, you should consider shopping for the best business insurance to pay for potential bodily injury and property damage claims.
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Dani Best
Licensed Insurance Producer
Dani Best has been a licensed insurance producer for nearly 10 years. Dani began her insurance career in a sales role with State Farm in 2014. During her time in sales, she graduated with her Bachelors in Psychology from Capella University and is currently earning her Masters in Marriage and Family Therapy. Since 2014, Dani has held and maintains licenses in Life, Disability, Property, and Casualt...
Licensed Insurance Producer
Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.