Liability insurance is designed to offer specific protection against third party claims, i.e., payment is not typically made to the insured, but rather to someone suffering loss who is not a party to the insurance contract
 liability insurance provides coverage for claims related to negligent business activities (injury related to the use of your product, for example) or the failure to use reasonable care. The insurer typically pays damages and legal defense fees as well as case-settlement charges.

How much liability coverage do you need? This can be difficult because benchmarks really do not exist. While some brokers recommend that your coverage match that of the largest court award for a case relevant to your business, others base recommendations on company assets.

Moreover, unlike property, which has a fixed value, liability claims do not have any limitations.

What is CGL Insurance?
Most companies obtain basic liability coverage through a commercial general liability (CGL) form. The CGL covers four types of injuries:
A) bodily injury that results in actual physical damage
B) loss property damage
C) personal injury
D) advertising injury
 
IMPORTANT: Professional Liability (Errors and Omissions Insurance) coverage is not provided by a Commercial General Liability policy. Commercial General Liability does NOT provide coverage for errors, contract performance disputes or any other Professional Liability issue. CGL policies for Arts Groups frequently exclude C) personal injury & D) advertising injury as it may overlap the professional activities of the organization.

Tenants Legal Liability Insurance (TLL) is usually required for the space you lease that is under your care, custody and control. It is a requirement of most leases and is usually available as part of the CGL.
 

excess liability insurance
Insurance coverage that is written in excess of primary insurance. It is designed to increase the limits of liability, thereby providing catastrophe coverage. Excess liability coverage does not respond to a loss until the amount of the loss exceeds (or exhausts) any existing primary policy limits. Example: A primary $1 million liability policy is written, and excess insurance is written for $2 million excess of the primary. The primary policy would pay all losses within $1 million and the excess policy would pay losses in excess of the primary coverage, up to the excess policy limit of $2 million.
 
 

umbrella liability insurance
A special liability policy that serves three main functions: provide high excess coverage over a primary or underlying liability policy; provide broader coverages than the primary liability policy, usually excess of a self-insured retention; and provide a drop-down feature that automatically replaces coverage provided by underlying policies when they are reduced or exhausted by losses. Ordinarily used for commercial risks, umbrellas have also been developed for personal lines. Simply Put These types of policies offer extra liability coverage that kicks in for losses when the limits of your primary liability policy are reached. Umbrella coverage often applies to either business liability or automobile liability insurance. Using an umbrella policy, you can often purchase millions of dollars of extra coverage for as little as a few hundred dollars.