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Liability insurance
Liability insurance provides protection for the automobile owner from lawsuits. Liability insurance is a general insurance that helps the insured to transfer the risk and protect oneself from lawsuits. It offers protection against the third party claims. Incase any damage is incurred to the third party while driving, this insurance pays for the loss caused by the insured driver. But this insurance does not cover the loss made intentionally will not be covered by this insurance.
In many countries, liability insurance is mandatory for those who are at risk of being sued by third parties for negligence. Most of the clauses of mandatory policy of liability insurance cover the drivers of vehicles. It covers those professionals those who offer services to public, those who manufacture harmful products and employers.
The reason for covering these groups is they put others at risk of loss or damage. So the public policy of several countries requires these groups to carry insurance. Even a skilled driver can cause damage to other's property or life. So liability insurance is inevitable for all the vehicle owners irrespective of their driving skills.
More Glossary Terms Explained here
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