If you own a dog in Indiana, it is your general responsibility to ensure that dog is not running loose or harming people. If your dog bites someone, you face serious liability and could be sued or even thrown in jail, according to the Indiana General Assembly. You are responsible for any injuries your dog causes if you do not have your dog properly contained and the dog was not provoked in any way.
Keep in mind that provocation is important. If someone was messing with your dog or your home, then he or she may not be able to hold you liable. The law specifically says the person who is injured needs to have been acting "peaceably" when the attack occurred.
It does not matter if your dog has ever bitten someone before or even acted aggressively. If a bite occurs, you are responsible in most cases where the other person was minding his or her own business.
There are some exceptions. Specifically, the exceptions apply to dogs who are working and owned by the government or a government entity. This means that your pet dog is not exempt under the law. For example, a K9 working with law enforcement that bites someone is not going to make its owner liable in most cases.
In general, you need to be responsible for your dog and ensure it is properly restrained. If you know your dog can get aggressive, then you need to take measures to ensure it cannot get to people who are walking by your home or that it cannot get loose. This information is for education and is not legal advice.