How does liability insurance typically protect a business?

Liability insurance primarily protects a business by providing legal defense for injury-related claims. This type of insurance is designed to cover the costs associated with claims made against the business for injuries, damages, or losses that occur as a result of the business's operations. When a claim is made, liability insurance not only pays for settlements or judgments but also covers legal defense costs, allowing businesses to effectively manage the financial impact of legal challenges. This is crucial because the expense of legal representation can be significant, and ensuring that this cost is covered helps to safeguard the business's financial health.

This protection is particularly important in industries where the risk of injury to clients, customers, or third parties is higher. Without liability insurance, a business may face substantial legal costs that could threaten its viability.