A crash-course format: fifteen common claims about liability insurance – each with a one- or two-sentence correction and a link to the full article. The five deepest myths get a dedicated article of their own: common myths.
- The myths fall into two families: over-the-top expectations (“it pays for everything”) and unwarranted dismissal (“I don't need it”).
- Both lead to the same place: a bad decision – the truth sits somewhere in between.
The “it solves everything” family
1. “Liability insurance pays for everything.” Not true: every policy has exclusions and a deductible – but the boundaries can be learned (exclusions map).
2. “It also covers fixing my own faulty work.” Typically not – that's a business risk; it only becomes a cover question once the faulty work damages something else (what's covered and what's not).
3. “It pays my fines for me too.” A fine is a penalty, not a loss – typically excluded (exclusions map).
4. “With insurance, negligence is covered.” An everyday mistake, yes – gross negligence can mean an exclusion, a denial of cover, or recourse (gross negligence).
5. “My business policy covers my private life too.” No – personal liability is a separate world, typically a matter for home insurance (personal liability article).
The “I don't need it” family
6. “I'm a small business, nobody's going to sue me.” A claim tracks the loss, not the size of the business (do I need liability insurance).
7. “I haven't had a claim in twenty years – it's pointless.” A claims-free record is a pricing advantage, not protection – it says nothing about the next loss (common myths).
8. “I'm careful, nothing's going to go wrong for me.” Things go wrong for careful people too – and the injured party looks at the damage, not the effort (loss prevention – which actually helps).
9. “I run a Kft. – limited liability protects me.” The company's assets are still at stake – and the consequences can reach further than that (if there's no insurance).
10. “My clients are understanding, we'll work it out between us.” A good relationship gets tested at the first serious claim – and behind the client there may be an insurer pursuing recourse.
The technical misunderstandings
11. “I'm taking out cover now, it'll cover last year's work too.” The retroactive date decides that – on a first-ever policy, typically not (key article).
12. “Switching insurers only changes the premium.” A poorly handled switch can open up a retroactive gap – continuity is the first question (switching-insurer article).
13. “The chamber minimum equals good protection.” The minimum is just an entry point; proper sizing starts from your own contracts and exposures (minimum-limit article).
14. “If there's a claim, I call my lawyer first.” The standard route: document, then report it on the insurer's claims line – a lawyer may come into play at the disputed stage (first steps).
15. “A broker costs more than buying direct.” Advice is free of charge – the broker's remuneration is paid by the insurer (broker article).
If you'd like to know what's true and what's a myth for your own policy: contract checklist or free consultation.
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