No matter what kind of business you are in, you need liability insurance meaning third-party coverage. Many people are not aware that there are several types of liability policies, and that you can choose among them based on your individual needs. Here is an explanation of the most common ones.
General liability insurance protects you from financial loss in the event that someone is injured or experiences property damage while on the premises of your business or as a result of your business’s actions. It pays for medical bills, property replacement or repair, and legal costs of defending yourself in court.
Public liability protects against claims made by the general public, rather than from employees or business associates. Public liability is less comprehensive than general liability, and is the minimum amount of coverage a business should have.
If your net worth is greater than all of your personal insurance policies combined, you should consider personal liability insurance. It is less common that the other types, but is a good idea for those with a large amount of assets.
Once you understand the meaning of liability insurance, it is easy to see why you need it. Without this type of basic protection, you risk financial responsibility for lawsuits from the general public.