Liability insurance is a type of insurance coverage that protects your business from claims of negligence or other wrongdoing that result in injury, property damage, or other losses to a third party. Liability insurance can provide financial protection in case your business is sued, and can help cover legal defense costs, settlement or judgment payments, and other related expenses.
For example, if a customer slips and falls on a wet floor in your store, they may sue your business for negligence and seek compensation for their medical bills and other damages. If you have liability insurance, your insurer may cover the costs of defending against the lawsuit and paying any settlement or judgment.
There are many different types of liability insurance, including general liability insurance, professional liability insurance, and product liability insurance. Each type of coverage protects against different types of risks and exposures.
It's important to note that liability insurance typically has limits, meaning that the amount of coverage provided by the policy is capped. You'll need to choose a policy with appropriate limits based on the size and scope of your business and your potential liability risks.
Additionally, there may be exclusions or limitations to coverage, such as intentional acts or criminal behavior. It's important to carefully review the terms of your policy and understand what is and isn't covered.
In order to ensure that your business is adequately protected, it's important to work with a licensed insurance agent or broker who can help you select the right coverage options and limits. You may also want to consult with an experienced business attorney to assess your liability risks and develop a risk management plan.
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