There are a few main types of insurance.  The most basic type of insurance is the type that you have in order to protect your own property or health.  Another common type of insurance is called liability insurance, which protects you against the risk of being sued if you commit an act that causes somebody else pain or suffering.  Liability insurance covers all legal claims that may be filed against the insured for a variety of reasons.

One of the most common examples of liability insurance is with vehicle insurance.  When you’re driving a vehicle and you happen to get into an accident, you want to know that the other party will be covered if they are hurt or their vehicle is damaged.  This is where your liability insurance comes into play; you won’t be held liable for your accident even if it was your fault.  If you were to get into an automobile accident and weren’t carrying insurance while somebody else was hurt and it was your fault, you would be held liable for all of their medical expenses in addition to the cost of fixing their vehicle.

Another common example of liability insurance is property liability insurance.  The most common example would be somebody visiting your home and falling on your icy sidewalk.  Obviously, you didn’t mean to cause harm to them, but your negligence caused harm.  The medical payments they would incur would be taken from your insurance policy.  Liability insurance is one of the most important aspects of insurance.

Without liability insurance, you would be held liable for every single one of your actions and would be at the constant threat of being sued or otherwise losing money.  Liability insurance helps protect your common interests while keeping you financially sound at the same time.