Everything You Need to Know about Liability in Insurance
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Liability is a term used to describe who is at fault for an accident. If you are at fault or liable for an accident, you may be required to pay damages to the other party involved.
Table of Contents
- What Is a Liability Insurance
- What Are the Different Forms of Liability Insurance
- How Do You Establish a Liability Following an Accident
- Conclusion
In insurance, liability refers to the amount of money an insurance company will pay out if you are found to be at fault for an accident. This can include both property damage and personal injury. In most cases, your insurance company will determine how much liability coverage you need based on the value of your assets. If you have a lot of assets, you will probably need a higher liability coverage than someone with fewer assets.
What Is a Liability Insurance
Liability insurance protects an individual or business from being held responsible for any damages or losses they may cause to another person or property. This type of insurance can be purchased as a standalone or larger package.
What Are the Different Forms of Liability Insurance
Here are some forms of liability insurance.
1. Business Liability Insurance
A business liability insurance policy can protect your company from financial damages that may occur if you are held responsible for injuring another person or damaging their property. This type of insurance can help cover the cost of legal fees, settlement costs, and any other expenses that may be associated with a liability claim.
Business owners should work with an insurance agent or broker to determine the type and amount of liability insurance coverage that best meets their needs.
2. Property Insurance
A liability insurance policy can help protect your assets if you are sued for damages or losses that you may have caused to another person or property. This type of insurance can be purchased as a standalone policy or as a larger insurance package.
There are different forms of liability insurance, but the most common type is property insurance. This policy can help protect your home, business, or personal property from damage or loss. If you are sued for damages, your property insurance policy can help pay for the cost of your defense.
3. Medical Malpractice Insurance
Medical malpractice insurance is a type of liability insurance that protects healthcare providers from being held liable for any damages or losses that they may cause to their patients. This type of insurance can help protect healthcare providers from financial ruin if they are sued for malpractice.
If you are a healthcare provider, you must ensure that you have the proper coverage in place to protect yourself from the financial risks associated with medical malpractice.
4. Auto Insurance
Other types of liability insurance include automobile insurance, which can help protect you from damages or injuries that you may cause to another person in a car accident. Professional liability insurance can help protect you from damages or losses that you may cause to another person or business during your professional work.
No matter your liability insurance, you must ensure enough coverage to protect your assets. You should also ensure that you understand the terms and conditions of your policy to know what is covered and what is not.
How Do You Establish a Liability Following an Accident
To file an insurance claim against another party, you must be able to show that the party is liable for the accident. This means that you will need to provide evidence that the other party was at fault in some
After an accident, the insurance company will look into what happened to determine if you were at fault or if someone else could be held responsible. If more than one person is found to be responsible for the accident, they will share the liability, lowering the compensation the insurance company has to pay.
Here are some factors in determining if the insured party is liable for the accident and the damages sustained by the injured party.
1. Did the insured party show the duty of care during the incident?
When it comes to accidents, one of the key things that insurance companies look at is whether the person involved in the accident showed a duty of care. This means they will examine whether the person took reasonable precautions to avoid the accident. For example, if someone were driving recklessly and caused an accident, they would likely be at fault.
2. Was the insured party negligent in any way?
Negligence is another key factor that insurance companies look at when determining liability. This means that they will look at whether the person involved in the accident could have reasonably avoided the accident if they had acted differently. For example, if someone was speeding and caused an accident, they could be negligent.
3. Did that negligence lead to another incident?
Accidents can happen even when everyone is being careful. However, when negligence is a factor in an accident, it can be held responsible.
If someone does something that causes an accident that injures you, you may have grounds to sue them. For example, if a distracted driver swerves into your car, you can sue them. Or if you slip and fall because there was a spill on the floor that you didn't see, you can sue the business.
4. Did the insured party violate any safety rules or regulations?
Insurance companies will also examine whether the person involved in the accident violated any safety rules or regulations. This could include speeding, driving under the influence, or running a red light. If the person violates these rules, they could be at fault for the accident.
5. Did the insured party cause the accident intentionally?
In some cases, the person involved in the accident may have caused it intentionally. This could be the case if they were trying to harm someone else or damage their property. If the person did this, they would likely be found to be at fault for the accident.
Conclusion
Liability insurance is one of the most important types of insurance, as it can protect you from financial ruin if you are sued for damages. When choosing a liability insurance policy, you must consider the potential risks you may face and select a policy that provides the right amount of coverage.
At Mendez & Sanchez Law, we provide a premises liability lawyer and California accident attorney that can help you if you have been involved in an accident and need help filing a claim. Our lawyers have extensive experience handling premises liability claims, so we know how to navigate the complexities of these types of cases. Let us help you get the compensation you deserve. Schedule an appointment with us today!
Frequently Asked Questions
How long do I have to file a liability insurance claim after a car accident in California?
In California, you generally have 2 years from the date of a car accident to file a personal injury lawsuit under the statute of limitations established by California Code of Civil Procedure Section 335.1. However, insurance policies often require you to report accidents 'promptly' or within a much shorter window — sometimes as little as 30 days — so you should notify your insurer as soon as possible after the accident. If a government vehicle or entity is involved, the deadline to file a claim shrinks to just 6 months under the California Government Claims Act (Government Code Section 911.2).
What happens if both drivers are partially at fault for an accident in California — does that affect my insurance payout?
California follows a 'pure comparative fault' rule under California Civil Code Section 1714, which means your compensation is reduced by your percentage of fault — but you can still recover damages even if you were 99% at fault. For example, if you suffered $100,000 in damages but were found 30% responsible, you could still recover $70,000. This makes it critically important to gather strong evidence at the scene, because the liability percentages assigned by insurance adjusters directly affect how much money you actually receive.
What's the minimum liability insurance coverage required to legally drive in California?
California law under California Insurance Code Section 11580.1b requires all drivers to carry a minimum of $15,000 in bodily injury liability per person, $30,000 per accident, and $5,000 for property damage — commonly written as 15/30/5 coverage. As of January 1, 2025, these minimums increased to $30,000 per person, $60,000 per accident, and $15,000 for property damage under AB 1107. These are minimums only, and personal injury attorneys strongly recommend carrying higher limits because serious accident costs can easily exceed these amounts, leaving you personally responsible for the difference.
Can I sue someone personally if their liability insurance doesn't cover all my medical bills after an accident in California?
Yes — in California, if the at-fault party's liability insurance policy limits are not enough to cover your total damages, you have the right to pursue the individual personally for the remaining amount through a civil lawsuit. Under California Civil Code Section 3281, you are entitled to full compensation for all damages proximately caused by the negligent party, regardless of what their insurance covers. A skilled personal injury attorney can help identify whether the at-fault driver has personal assets worth pursuing or whether other coverage sources — like your own underinsured motorist (UIM) policy — can make up the difference.
What's the biggest mistake people make when dealing with liability insurance after an accident?
The single most costly mistake accident victims make is giving a recorded statement to the at-fault party's insurance adjuster without first consulting an attorney. Insurance adjusters are trained to ask questions that can be used to assign you more fault or minimize the severity of your injuries, which directly reduces your payout under California's comparative fault rules. You are never legally required to provide a recorded statement to the other driver's insurer, and anything you say can be used against your claim — so politely decline and speak with a California personal injury attorney first.
How does liability work when I'm injured by an employee who was driving for work in California?
In California, when an employee causes an accident while performing work-related duties, the employer can be held liable under the legal doctrine of 'respondeat superior,' which is codified in California Labor Code Section 2100 and supported by California Civil Code Section 2338. This means you may be able to file a liability claim against both the individual driver and the employer, which is significant because businesses typically carry much higher insurance policy limits than individual drivers. Even if the employee was running a work errand in their personal vehicle, California courts have often extended employer liability in these situations, making it worth investigating thoroughly.
Does homeowner's liability insurance cover me if someone gets hurt at my house in Los Angeles County?
Yes — standard homeowner's liability insurance covers you if a guest, visitor, or even a trespasser in some cases is injured on your property anywhere in California, including Los Angeles County. Under California premises liability law rooted in California Civil Code Section 1714, property owners owe a duty of reasonable care to keep their property safe, and your homeowner's liability policy steps in to cover legal defense costs, medical bills, and settlements if you're found responsible. Most standard policies include $100,000 to $300,000 in personal liability coverage, but Los Angeles homeowners with significant assets should consider an umbrella policy for additional protection given the high cost of litigation in California courts.