In a general liability insurance policy, legal costs of a business in a covered liability lawsuit have to be paid by the insurer. Covered liability claims include property damage, bodily injury, personal injury and damages from false advertising, also called advertising injury. Insurance companies also cover general and compensatory damages. However, liability insurance policies do not cover punitive damages, as they are deemed punishment for deliberate actions.

General liability insurance policies always declare a maximum amount that insurers have to give during the policy period. Under the policy, there is also a maximum amount that the insurer has to pay per occurrence. For example, if a company has a $1.5 million occurrence cap and loses a lawsuit of $2 million; the insurance company is obligated to pay just the $1.5 million; the rest has to be paid by the business company.

As a cover against these types of circumstances, companies buy umbrella liability insurance, which comes into the picture where general liability coverage stops. It covers payments that go beyond the company’s policy’s limits and gives extra protection for liabilities not covered in the standard insurance policy.

Generally, there is a requirement for the policyholders to report to the insurance company as soon as an accident that can lead to a liability claim has taken place. The business owner will then have to help in the investigations, forward legal notices, etc.

It is mandatory that drivers carry liability insurance. If you are hit by another vehicle, that party’s liability insurance pays for your damages. But what happens if that person doesn’t have one? This is a realistic scenario in Los Angeles, where one out of three drivers don’t have liability insurance, according to police estimates. It is generally considered that people without insurance normally do not have meaningful assets. In such cases you will be protected if you have Uninsured Motorist Insurance (UMI). There are two parts to it – personal injury and property damage. Both can be covered. To encourage drivers to obtain liability insurance, a low-cost scheme for those who have no more than one endorsement on their licenses has been introduced in Los Angeles and San Francisco, through government initiatives.

You may find with your home insurance that public liability is included and you will need to take note of up to what amount you are covered for. These days you can find yourself in a situation where someone comes onto your property and injures himself or herself in some way and you are up for a hefty compensation amount. So check all you insurance policies.

There are various types of liability insurance, including general liability that works in the same way as auto liability insurance, but deals with businesses. General liability covers clients from third-party claims. Liability insurance is intended to offer protection against claims by the third party, i.e., payment is not given to the one insured, but to the person suffering the loss and who is not a party to the insurance. Usually, liability insurance policies do not cover contractual liability or damages that are caused deliberately. When a claim for damages is put forward, the insurance carrier can exercise its right to defend its client. Policy limits do not affect the legal costs.

When one is doing public shows, especially the ones that deal with magic, the very best thing anyone could do to stay in the safe side is to buy an insurance for your act. It is not an option. It is a need for goodness sake.

One of the good insurance that some entertainers have has a one million dollar liability. It came from an agent from the Farmers Insurance Group.

Having an insurance is like having a fire extinguisher. It is so much better to have one than not have it at all. You feel safe, protected and covered. One million dollar tops and is quite enough to give you a sleep-heavy night and a wake-up-fresh morning.

It has been said that the Society of American Magicians has the kind of insurance of this type. It is very important that you get an insurance. If you have one or if you are planning to purchase one, make sure that the insurance policy you have a product clause.

This works well just in case you use balloons for your act, or birds for that matter. If one of the audience members happen to take it home with them and they accidentally choke on the balloon or get bitten by the bird, you have nothing to worry about because you are definitely covered.

For your information also, if you have performer’s insurance and you happen to perform a magic act while you were not in your costume, most likely you are not covered.

If you have liability insurance and while you are performing, a child insists that he or she wants to touch or to have one of your props, make sure that you make it clear and known to everyone concerned – as they may be potential witnesses – that you are giving the prop or props to the parent. Hand it over to the parent. Doing so transfers the liability on the hands of the child’s parents.

There are also magic tricks performed by clowns. Currently, it is highly unadvisable – fortunately or unfortunately – for clowns or any performer to hug children or to get close enough unless it is to shake hands.

These days you really cannot be too careful. And being too careful is still the best way to go.

It is best that prior to doing a magic act or any public show for that matter, that you – as a performer – tell all the adults and children in the audience about some specific props that you might be distributing to them during the course of the show. If for example you will be using balloons, announce beforehand that children’s mouths and balloons do not mix.
Doing so keeps you from any liability and your audience safe from choking unnecessarily.

One performer has an existing one million dollar liability, it also includes five hundred thousand dollars worth of product liability. The insurance also covers any event wherein the performer and his or her employee is entertaining. However, it does not cover any contractors that are independent from the performer which the performer has hired. If the performer needed to hire someone outside, the performer always requested for an ‘additional insured’ from the insurance company.

Make sure though that once you get an insurance, that insurance company should be able and willing to give you a rider that will be able to cover you if in case you are working or need to work off premises and on a particular client’s house, business office, facility, or any other area that is different from where you regularly and usually work in. It is a standard item and there should not be that much fuss over it. Any good insurance company should be able to do it.

All you need to do is be persistent. It is an item that is almost always considered a standard on many insurance policies.