Liability insurance is split into two basic types of coverage. Bodily Injury, referred to as “BI,” and Property Damage, referred to as “PD.” Having this coverage ensures the insurance company will defend you in court and pay, up to your policy limits, for any damages resulting from an accident you have caused (also referred to as “found liable” for or “at-fault” for).

So what is included in Bodily Injury coverage? Quite a bit actually.  Bodily harm, sickness, or disease, including required care, loss of services and death.

Below is an extreme example intended to outline how all parts of the definition may come into play.

Imagine you cause an accident with a vehicle carrying toxic chemicals. You are clearly at-fault, so there is no question that your insurance will be paying for all resulting damages. The driver of the vehicle you hit suffers from a broken arm, but worse, is exposed to the chemicals he was carrying, as they spilled into the cab of his truck.

Bodily Harm – The cost of surgery to repair the bodily harm (broken arm and chemical burns) will be covered by this provision.

Sickness or Disease – What if the truck driver becomes sick (even well into the future) as a result of the contact with the toxic chemical? This is covered under the “sickness” portion of your BI coverage.

Required Care – Perhaps the driver also requires full time care by a home nurse for two months while recovering. You are covered for this as it pertains to the “required care” portion of the definition.

Loss of Services – The truck driver may have been the sole breadwinner in his family. His income has ceased as a result of your negligence. “Loss of services” will provide for his lack of income.

Death – If the truck driver were to die as a result of the accident, your insurance policy would pay for the resulting expenses and any judgment against you as a result of a lawsuit.

Situations similar to the above, while on the extreme side, are not unheard of. This case is a great illustration of the argument for carrying the highest liability limits your budget can afford.

Remember, your insurance company will pay damages you are liable for, but only up to the policy limits. If the situation above occurred and you had no insurance, or low liability limits, you would be on the hook for any damages above your policy threshold.

Additionally, the case for carrying Uninsured Motorist (UM) and Underinsured Motorist (UIM) coverage is evident in this example as well. In the above example, the truck driver would want to have UM and UIM in the event the liable driver has no insurance or low liability limits.

Just because the “at-fault” party loses a court case and owes money does not mean they will have the means to pay it, which could potentially result in you not having the best care available.

Every state requires drivers to carry liability coverage in order to operate a motor vehicle on public roads. This concept is referred to as compulsory insurance. Further, every state has mandatory minimum liability limits that each insured driver must obtain.

Contact you insurer or independent agent if you’re not clear on the coverage you have, or if you want to make changes to your policy.