What is Liability insurance?
Also known as: civil liability insurance, third-party insurance
A type of insurance that covers not the policyholder's own property or health, but the compensation the policyholder must pay for harm caused to other persons (third parties). The payment usually goes to the injured party, and the policyholder is protected from paying a large sum out of their own pocket. Separate policies are taken out depending on where the liability arises from; for example, professional liability insurance covers harm caused to a client by a specialist's error in the course of work.