Illustrate the term Liability Insurance

Question

Illustrate the term Liability Insurance?

Answer 1

In keeping with good risk management by businesses, it is considered prudent to purchase liability insurance. This is a “contract in which an insurance company agrees, in exchange for a price, to pay damages on behalf of a person who incurs liability.” Liability insurance also includes a duty to defend, whereby the insurance company pays the expenses related to lawsuits against the insured party.