Liability Insurance

Personal liability insurance covers damages when you injure someone or damage their property in daily life. In bicycle accidents causing serious injury to pedestrians, court-ordered damages have exceeded 90 million yen - this risk is the backdrop for the nationwide push to mandate bicycle insurance. Covered incidents include everyday occurrences such as a child breaking a friend's window, a pet dog biting a passerby, or a water leak in your apartment damaging the unit below.

Personal liability insurance is more commonly added as a rider to home or auto insurance rather than purchased standalone, with coverage of 100 million yen to unlimited available for just 100 to 200 yen per month in additional premium. Many plans cover the entire family, making the cost-performance ratio extremely high. Check whether your existing insurance already includes a personal liability rider, and consider adding one if it does not.

Business liability insurance comes in several types depending on the industry and nature of the risk. Premises liability insurance covers accidents caused by facility management failures (such as a customer slipping on a wet floor). Product liability (PL) insurance covers accidents caused by defects in manufactured or sold products. Bailee liability insurance covers damage to or loss of items entrusted by customers.

For freelancers and sole proprietors, professional liability insurance (E&O insurance) is also important. It covers liability when a system delivered by an IT engineer causes damage to a client, or when a consultant's advice leads to losses. Premiums vary by industry, revenue, and coverage amount, but many plans are available starting at 30,000 to 100,000 yen per year. The smaller the business, the higher the risk that a single liability claim could threaten business continuity, making early enrollment advisable.