Statutory Liability

What Does Statutory Liability Mean?

Statutory liability arises when a party is held responsible for a specific occurrence based on the terms of a particular law or statute. Many individuals and companies purchase statutory liability insurance to protect themselves against situations where they might be held accountable for certain events due to statutory liability. In practice, this type of protection is usually built into a company’s general liability insurance policy, which covers claims arising from both common-law and statute-based wrongdoing.

Insuranceopedia Explains Statutory Liability

Most companies strive to comply with the law. However, some laws can be ambiguous, misunderstood, or difficult to interpret, which may lead to a company unintentionally violating them. In such cases, even if the company did not intend to act illegally, it can still be held accountable under statutory liability. Statutory liability insurance provides coverage to protect against such situations. Small businesses often get this coverage bundled with property coverage through a business owner’s policy, which packages general liability with other common business protections.