Bodily Injury Liability

Example

“When the pedestrian sued for $150,000 after being hit by his car, Tom's bodily injury liability coverage paid the settlement and legal fees, protecting his personal savings.”

Memory Tip

Remember 'BIL pays the BILL' - Bodily Injury Liability pays the medical bills when you're at fault for hurting others.

Why It Matters

Bodily injury liability coverage protects your financial future by covering potentially devastating costs when you accidentally hurt someone. Without adequate coverage, you could face personal bankruptcy from medical bills, lost wage claims, and pain and suffering awards that can easily reach hundreds of thousands or millions of dollars.

Common Misconception

Many people believe minimum state-required bodily injury liability limits are sufficient for protection, or that the coverage pays for their own injuries. In reality, minimum limits are often inadequate for serious injuries, and this coverage only pays for others' injuries - not your own medical expenses.

In Practice

Mike has $250,000 per person bodily injury liability coverage and causes an accident that severely injures a surgeon, resulting in $180,000 in medical bills and $200,000 in lost income claims. The total $380,000 claim exceeds Mike's per-person limit, so his insurance pays $250,000 and Mike is personally responsible for the remaining $130,000. If Mike had only the state minimum of $25,000 coverage, he would owe $355,000 out-of-pocket.

Etymology

This term evolved from early 20th-century legal concepts combining 'bodily injury' with 'liability' (from Latin 'ligare' meaning to bind), reflecting the legal obligation or binding responsibility to compensate others for physical harm caused.

Common Misspellings

Related Terms

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