Limits of Liability

What Are Limits of Liability?

Limits of liability refer to the maximum amount an insurance policy will pay for damages resulting from a claim. These limits are typically outlined in the policy and may be categorized by occurrence (per claim) or aggregate (total coverage over a policy period).

In personal injury cases, limits of liability define the maximum compensation available from the defendant’s insurance, influencing settlement negotiations and trial outcomes.

Why Are Limits of Liability Important?

Limits of liability are important because they establish the financial boundaries of a personal injury claim. For plaintiffs, understanding these limits helps set realistic expectations for potential compensation. For defendants, insurance limits define their exposure to financial risk.

In cases where damages exceed policy limits, plaintiffs may need to pursue additional compensation directly from the defendant’s assets, creating a more complex legal scenario.

Limits of liability underscore the importance of adequate insurance coverage and careful planning in personal injury cases.

Additional Considerations

When dealing with limits of liability in personal injury claims:

• Policy Review: Obtain and analyze the defendant’s insurance policy to confirm coverage limits.
• Excess Damages: Consider additional claims against the defendant if damages exceed policy limits.
• Umbrella Policies: Determine if the defendant has supplemental insurance coverage to address higher damages.

Limits of liability are a critical factor in evaluating the potential outcomes of personal injury claims.

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