Final answer:
Liability insurance helps protect businesses from lawsuit judgments by covering costs related to claims of negligence, personal injury, or property damage caused by the business.
Step-by-step explanation:
A business can obtain liability insurance to protect itself against lawsuit judgments. Liability insurance helps protect the business from financial losses and legal obligations that may arise from claims of negligence, personal injury, or property damage caused by the business or its products.
For example, if a customer slips and falls in a business establishment and sues for damages, liability insurance can cover the costs of the lawsuit and any potential settlement.
By having liability insurance, a business can transfer the risk of certain liabilities to an insurance company, which can help safeguard the business's assets and minimize financial losses in the event of a lawsuit.
It is important for businesses to carefully consider their liability insurance needs and work with insurance professionals to determine the appropriate coverage limits and policy terms that suit their specific business activities.