Basic Limits Of Liability
What Does Basic Limits Of Liability Mean?
Basic limits of liability refer to the minimum level of liability insurance that is legally required for a specific liability. For example, individuals who drive cars must purchase at least the basic limit of liability insurance in order to legally operate a vehicle. This liability insurance is typically offered as part of an auto insurance policy.
Insuranceopedia Explains Basic Limits Of Liability
Basic limits of liability are required by the government in certain situations because activities such as driving a car or running a manufacturing business often carry inherent risks. Without liability insurance, these activities could lead to significant financial losses for all parties involved if an accident occurs. While policyholders generally have the option to purchase coverage beyond the basic limit of liability, doing so tends to be more expensive. As a result, many people choose to buy only the basic limit.
