Public liability coverages generally defend against third-party allegations of your negligent action or non-action. That is, you or another insured are alleged to have committed a civil wrong or tort. Bodily injury liability (BI) and property damage liability (PD) coverages can be purchased with either split limits – a separate limit for BI and for PD, or a combined single limit (CSL) – one limit for both BI & PD combined. An example of a split limit – the availability of which varies by insurance company: $100,000 per person BI /$500,000 per occurrence BI / $500,000 per occurrence PD. An example of a single limit: $500,000 CSL.
Both of these examples above represent our recommended minimum public liability limit as a “starting point” to protect your personal assets and income from third party law suits. It’s a starting point in that:
- the limits may be still be insufficient to fully protect your assets, future earnings and civil responsibility;
- the cost of medical care alone can overwhelm BI insurance limits;
- a $500,000 limit satisfies the minimum underlying requirement for many personal umbrella liability policies;
- we live in a litigation-happy society today: Sue the bad boy.