What is Liability Insurance?

Liability insurance refers to the form of property insurance in which the insurer assumes liability for compensation to a third party in accordance with law and is required to pay compensation. In the case of liability insurance, where the insured's civil compensation liability to others in accordance with the law is the subject of insurance, there is no insured amount in the contract, and a compensation limit is stipulated. Liability insurance only covers the insured's civil liability for negligence and infringement. It is not responsible for damage caused by intentional acts. Except for special agreements, liability for breach of contract is usually not included. There are two ways of underwriting liability insurance. One is underwriting as a component or additional part of other insurance, and not as a separate insurance for major risks, such as third-party liability insurance in automobile insurance and collision liability insurance in ship insurance. The other is underwritten separately as the main risk. Its forms include public liability insurance, product liability insurance, employer liability insurance, and professional compensation insurance, that is, professional liability insurance. Liability insurance, as a form of insurance, developed relatively late. It was established in the second half of the 19th century with the protection of victims of disaster accidents in modern society. ^[1]

Liability Insurance

Liability insurance refers to the form of property insurance in which the insurer assumes liability for compensation to a third party in accordance with law and is required to pay compensation. In the case of liability insurance, where the insured's civil compensation liability to others in accordance with the law is the subject of insurance, there is no insured amount in the contract, and a compensation limit is stipulated. Liability insurance only covers the insured's civil liability for negligence and infringement. It is not responsible for damage caused by intentional acts. Except for special agreements, liability for breach of contract is usually not included. There are two ways of underwriting liability insurance. One is underwriting as a component or additional part of other insurance, and not as a separate insurance for major risks, such as third-party liability insurance in automobile insurance and collision liability insurance in ship insurance. The other is underwritten separately as the main risk. Its forms include public liability insurance, product liability insurance, employer liability insurance, and professional compensation insurance, that is, professional liability insurance. Liability insurance, as a form of insurance, developed relatively late. It was established in the second half of the 19th century with the protection of victims of disaster accidents in modern society. ^[1]

Liability insurance refers to a type of insurance that takes the legal compensation risk of the insurance client as the object of insurance.

Compared with general property insurance, liability insurance is based on the law of large numbers, with the same operating principles and similar operating methods (except for some types of statutory insurance), which both compensate the insured for economic losses.

(I) Features of the foundation of the generation and development of liability insurance

The basis for the emergence and development of liability insurance is not only the objective existence of various civil legal risks and the social productivity reaching a certain stage, but also the continuous improvement of the legal system due to the progress of human society. The improvement and improvement of the legal system is the responsibility The most direct basis for the generation and development of insurance.

(II) Characteristics of Liability Insurance Compensation Objects

Although the insurer's compensation in liability insurance is paid to a third party, such compensation is essentially the liability of the insured to the third party, which indirectly protects the interests of the insured and directly protects the interests of the injured third party. An alternative guarantee mechanism.

(Three) the characteristics of the subject of liability insurance

Liability insurance covers all kinds of civil legal risks and has no physical object.

When the insurer underwrites liability insurance, there are usually several levels of compensation limits for each type of liability insurance business, which are selected by the insured himself. The compensation limit selected by the insurer is the maximum limit of the insurer's liability. The economic compensation liability exceeding the limit can only be borne by the insured.

(four)

As a type of independent insurance business, liability insurance is applicable to all kinds of units, families, or individuals that may cause loss of property and personal injury to others. Specifically, its scope of application includes:

First, owners and managers of various public event venues;

The second is the producer, seller, and maintainer of various products;

Third, the owner, operator or driver of various means of transport;

Fourth, various units that need to hire employees;

Fifth, various units providing vocational and technical services; Sixth, urban or rural households or individuals.

In addition, there are risks of civil liability accidents during the construction of various engineering projects. The owners and contractors of construction projects also have insurance benefits for the risks of related liability accidents; all unit sites (that is, places for non-public activities) also exist. As for public liability risks, enterprises and other units also have the need to insure public liability insurance.

Liability insurance

responsibility

From the perspective of the development of liability insurance, the compensation limit, as the maximum limit of the insurer's liability, generally has the following types:

1. The compensation limit for each liability accident or a series of liability accidents caused by the same cause can be divided into two categories: the compensation limit for property damage and the compensation limit for personal injury or death.

2. The cumulative compensation limit during the insurance period, which can also be divided into the cumulative property loss compensation limit and the cumulative personal injury compensation limit.

3. In some cases, the insurer also combined both the property loss and personal injury or death into one limit, or only stipulated the compensation limit for each accident and a series of liability accidents caused by the same cause, but not the cumulative compensation limit.

In the practice of liability insurance, in addition to determining the compensation limit to clarify their underwriting responsibilities, the insurer also usually has a deductible provision in order to promote the insured to be careful, prevent accidents and reduce small, sporadic Purpose of compensation payments.

Liability insurance, as an insurance business, originated in European and American countries in the 19th century, and developed rapidly in industrialized countries after the 1970s. In 1880, the United Kingdom promulgated the "Employer Liability Law". A special employer liability insurance company was established that year to cover the legal liability of employers in the event of personal injury or property damage caused by their employers' faults in their operations. The Employer Liability Insurance Branch was opened in the United States, and the United States' own employer liability insurance company only appeared in 1889.

Most countries adopt compulsory measures and underwrite statutory automobile liability insurance. It began at the end of the 19th century and, together with industrial insurance, has become an important symbol of the demarcation between modern insurance and modern insurance. At that time, the British "Legal Accident Insurance Company" was the most active. It issued a car insurance policy that only covered the personal injury liability of the car to a third party. The insurance fee was charged from 10 to 100 pounds per car, and fire insurance was listed as an increase. It was not until 1901 that the United States began to have a modern third-party liability insurance for automobilesinsurance for legal liability for personal injury and property damage. After entering the 1970s, the development of liability insurance entered a golden age in industrialized countries. During this period, first of all, third party liability insurance for various transportation vehicles has developed rapidly; secondly, employers' liability insurance has become a popular liability insurance. With the development of the commodity economy, various civil activities have increased sharply, the legal system has been continuously improved, people's awareness of claims has been continuously enhanced, various civil compensation accidents have emerged endlessly, and finally the liability insurance in industrialized countries after the 1970s has been comprehensive , Rapid development, in the 1970s, the premium income of various liability insurance business in the United States accounted for about 45% -50% of the total non-life insurance business income, the liability insurance business income of some European countries accounted for the entire non-life insurance business income More than 30% of the income of Japan and other countries also account for 25% to 30% of its non-life insurance business income. After entering the 1990s, many developing countries have also increasingly attached importance to the development of liability insurance business.

The western insurance industry believes that the development of the insurance industry can be divided into three major development stages: the first stage is traditional marine insurance and fire insurance (later extended to all property insurance); the second stage is life insurance; the third stage is Liability Insurance.

After the insurance industry expands from underwriting material interest risks to underwriting personal risks, it will inevitably expand to underwriting various legal risks. This is an objective law proved by the development of western insurance industry. At the same time, we also know that the status of liability insurance in the insurance industry is very high. It is not only the result of the improvement of the legal system, but also the specific performance of the insurance industry's direct involvement in social development.