What is liability coverage?

By Allstate

Last updated: January 2024

If you cause an accident or someone is injured on your property, you could be found legally liable for resulting expenses, such as medical or legal bills. Liability coverage can provide you with protection from these types of expenses, which is why it's a good idea to understand the liability coverage your insurance policies provide and what limits apply. Having the proper safeguards in place may help protect you if the unexpected occurs.

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Personal liability coverage is a typical component of home, renters and condo insurance. But other types of insurance policies may also provide liability coverage. Here's an introduction to the types of liability coverage typically offered in different kinds of insurance policies:

Auto liability coverage

Liability insurance is a required component for all auto insurance policies. Auto liability insurance can help provide protection in two ways. If you cause an accident that injures another person, auto bodily injury liability coverage may help pay for their medical bills. Auto property damage liability coverage also helps pay for repairs to another person's property if you damage it with your car.

Learn more about auto liability coverage.

Homeowners liability coverage

Homeowners liability coverage provides financial protection if you're found liable after a guest is injured at your home. Suppose, for instance, a guest slips and falls on your pool deck or a flight of stairs. If you're found liable for their injuries, liability coverage may help pay for their related medical or legal expenses. This coverage is typically included in a standard homeowners insurance policy, though limits — the maximum amount an insurer will pay toward a covered claim — will apply. While premises liability is a big component of homeowners liability, liability also extends if you are liable for bodily injury or property damage off-premises. For example, you are playing golf and accidentally hit someone or something with your drive.

Learn more about home liability coverage.

Renters liability coverage

No one plans for a visitor to become injured, but it can happen. If you're found legally responsible for an accident that injures a guest at your rented home or apartment, renters liability coverage may help pay for the guest's related medical bills. Or, if your child accidentally throws a ball through a neighbor's window, personal liability coverage in a renters policy may also help cover the expense of repairing the window.

Learn more about renters liability coverage.

Condo liability coverage

Personal liability coverage is usually included in a standard condo insurance policy. This coverage can help provide protection if, for instance, you're found responsible after someone is injured at your condo or from causing damage to another unit owner's property. Most condo insurance policies also offer guest medical protection, which can help protect you financially if someone incurs medical bills after being injured at your unit.

Learn more about condo liability coverage.

Boat liability coverage

If you cause an accident with your boat, the liability coverage in a boat insurance policy helps protect you from paying out of pocket if you're found responsible for someone else's injuries or damage to another person's property.

Learn more about boat liability coverage.

Motorcycle liability coverage

Liability coverage generally comes in two forms on a typical motorcycle insurance policy. Bodily injury liability coverage helps protect you if you're found responsible for someone else's medical expenses or if someone loses income because of a motorcycle accident you caused. Property damage liability coverage helps prevent you from paying out of pocket for repairs or replacement to someone else's vehicle or property if you're found at fault for an accident involving your motorcycle.

Learn more about motorcycle liability insurance.

ATV liability coverage

As with many other types of liability protection, an all-terrain vehicle (ATV) insurance policy typically offers two kinds of coverage. Bodily injury liability coverage on an ATV policy helps pay for someone else's medical bills if they are injured in an accident you caused. If you damaged someone else's property while riding your ATV, property damage liability coverage would help pay for repairs.

Learn more about ATV liability insurance.

Snowmobile liability coverage

No one expects to crash through a fence or cause injury to another person while cruising over a blanket of fresh snow. But accidents can happen. Snowmobiles typically aren't covered under a homeowners or auto insurance policy, so you'll likely need to have a separate policy to help protect you and your snowmobile. Snowmobile liability insurance can help protect you if you're found responsible for someone else's medical bills or property damage resulting from an accident you caused while on your sled.

Learn more about snowmobile liability insurance.

Landlord liability coverage

Landlords may not live in a rental property they own but being the property owner comes with certain responsibilities. For instance, suppose a tenant falls over a broken step. If you were found negligent in maintaining the property or failed to advise the tenant of a potential risk, you could be found financially responsible for medical expenses resulting from an injury. Landlord insurance policies typically include liability coverage, which may help cover expenses related to these types of situations.

Learn more about landlord liability insurance.

Business liability coverage

Small business owners are at risk for certain situations like data breaches or business-related accidents, which is why many types of business liability coverages are offered. Some liability coverages, like commercial general liability, may already be included in a standard business insurance policy. But, there are other types of business liability insurance that you may want to consider, Cyber related coverages such as data breach liability insurance, Employment Practices Liability insurance or Errors and Omissions insurance. Business liability coverage may pay help pay for things like legal expenses or medical bills related to a covered accident that may happen at your business.

Learn more about business liability insurance.

Personal umbrella policy

An insurance policy may include some liability protection but remember that your policy's limits will apply. That means an insurance policy holder may still be required to pay out-of-pocket expenses if they're found liable for someone else's loss and the costs exceed the insurance policy's limits. This is when a personal umbrella policy may help. An umbrella policy provides liability coverage beyond the limits of another insurance policy and helps provide greater protection against costly medical bills or property repairs. For example, say you cause a vehicle accident and someone that was injured sues you for $1 million to cover their lost income and other expenses. If your auto policy's liability coverage has a limit of $500,000, you could be responsible for coming up with the additional $500,000. A personal umbrella policy helps cover those additional costs so you aren't scrambling to pay for the rest out of your own pocket.

Learn more about personal umbrella policies.

Liability protection isn't just a good idea — in some instances, you may be required to have it.Your insurance provider can help you understand the liability coverage that may be offered in your own policies, what coverage limits apply and help answer any additional questions you may have.