Tort

What Does Tort Mean?

A tort is a wrongful act or the infringement of a right caused by a person’s negligence, or any other act or omission that is not considered criminal in nature. In the context of insurance, liability insurance is designed to protect parties who are being sued for committing a tort. Businesses face the same exposure when a customer is hurt on their premises or by a product they sold, which is why most carry general liability insurance.

Insuranceopedia Explains Tort

A tort does not involve a breach of contract, but it results in injury or damage to a person, another party’s property, or another party’s reputation. Tort cases often arise from intentional or negligent actions, and the injured person or party may be awarded compensation through damages in a lawsuit.

If a person is accused of committing a tortious act and is found guilty, they must pay damages to the aggrieved party for the harm caused. If the accused has liability insurance, the policy can help cover defense costs and protect their assets up to the coverage limits. Because a tort award can run higher than a basic policy limit, figuring out how much liability insurance you need usually comes down to how much in personal assets and future income you want to protect. This is especially important in cases where the accused may need to make long-term payments to settle the case. On the other hand, if the accused lacks liability insurance, they will have to bear the financial burden themselves.