ABSTRACT
Liability insurance is an agreement under which an insurer promises to pay on behalf of an insured to a third party any sum, up to the policy limit and subject to the policy terms, that the insured is legally liable to pay to the third party as a result of the insured’s tortious conduct. Based on this definition, liability insurance involves three parties, an insurer, an insured and a third party, and there are three kinds of relationships among them.
