A person who has suffered bodily injury, property damage, or personal injury for which the insured is allegedly responsible might make a claim for damages. The claim is often settled out of court, and the insurer pays the claimant on behalf of the insured.
However, Legal liability might involve following type of damages: -
· Compensatory Damage
· Punitive Damage
Compensatory Damage includes both special and general damages that are intended to compensate a victim for harm actually suffered.
Special Damages Specific, out of pocket expenses are known as special damages. In case of bodily injury claims these damages usually include hospital expenses, Doctor and miscellaneous medical expenses, ambulance charges, prescriptions and loss to wages for the time spent away from the job during recovery.
General Damages are compensatory damages awarded for losses such pain and suffering, that do not have a specific economic value.
Punitive Damages are damages awarded by a court to punish wrong doers who, through malicious or outrageous actions, cause injury damage to others.
Most liability insurance policies do not specifically state whether punitive damages, intended to punish the insured for some outrageous conduct, are covered. There are certain State Laws that prohibit insurance coverage for punitive damages.
Liability Loss Exposures and Policy Provisions
