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Property and Liability Insurance - Research Paper Example
Pages 4 (1004 words)
Name Professor Subject School Date Property and Liability Insurance Property and liability insurance (PLI) is a form of general insurance of financing certain risks. The purchaser pays the premium to the insurance company and the insurance company would cover the liabilities from risks including property or to third party which is subjected to risk…
When the risk event occurs and a claim is made, the insurance company has to cover the claim. The main objective of taking a property and liability insurance is to cover one’s own property from various risks including theft, fire, accident, electric circuitry damages, lighting, etc, but to also cover third parties such as employees, visitors, general public, etc (Economy Watch, 2010). PLI provides for 3 major duties from the insurance company, namely, duty to defend, duty to indemnify and duty to address a reasonable clear claim. The duty to defend arises when the insured party is sued and claims a liability from the insurance company. The insurance company when it receives a claim from the third party may either choose to defend the insured, seek a declaratory judgment of no coverage or choose either. The second duty the insurer has is to indemnify the insured to what the insurance company is liable. The third duty the insurance company has is to settle all the reasonable claims and often if the insurer fails to settle the amount for within the claim limit, the insured can take the insurance company to court and claim beyond the set amount. ...
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