Liability insurance and you
Liability Insurance could be your life preserver in a sea of litigation.
What exactly does liability insurance cover?
It would easy to state the obvious; it covers you for anything for which you may be legally responsible. However, this is too narrow a definition and it is not our intention to be legal experts. Rather, a brief overview is offered to help clear some misunderstandings about legal liability and where it might arise.
When can I be sued?
In B.C., you can be sued, where your insurer may respond, for up to two years from the occurrence date. It used to be only a one year period. Of course, this assumes that the injured party is of a legal age. If the injured party is a minor, then that claim could take upwards of 18 years to land on your doorstep. Just when you may be thinking about enjoying life’s assets, they could be in jeopardy. The likelihood of being sued successfully may be very small, like winning a big lottery, but it’s the lottery that you don’t want to win.
Why can I be sued?
There are many ways you could be involved in a lawsuit, especially if it occurs due to a motor vehicle crash and we are not just talking about bodily injury. For example, you are involved in a crash that forces a tanker truck to lose its load of petroleum products on the highway. If you caused the crash, then YOU are legally responsible for the environment cleanup costs on top of any bodily injury claim cost. Worse yet, if that load finds its way into a local stream/creek the scope of the clean up could be extensive.
In a rush shopping for the weekend dinner and your cart runs into someone knocking them down and causing injuries. If that person has existing physical challenges and your run-in made the situation worse, the legal damages could be higher than you could imagine.
Fun at the lake may involve boat-based water sports but, if you don’t have liability insurance and you cause injuries to the participant, then you will be personally sued for damages. Even if you have liability insurance, if you are illegally operating a boat without the proper license or impaired then your insurer may deny coverage.
Let them sue me – I don’t have any assets!
Maybe not now, but your future earnings could be garnished for a very, very long time. A successful lawsuit against you will also affect your ability to own a car or a house. Remember that a claim of bankruptcy will not give you any relief from a lawsuit. Legal liability also pays for defence costs, even if there isn’t a successful judgement against you. These costs could be extensive if the suit drags on for years.
Liability Insurance is relatively inexpensive
Our advice is to purchase as much as you can afford. This becomes even more important as you accumulate assets through your life journey.