Final answer:
Businesses need liability insurance for protection against financial loss, compliance with legal requirements, and peace of mind.
Step-by-step explanation:
Businesses need liability insurance for several reasons:
- Protection against financial loss: Liability insurance protects businesses from financial loss in the event of a lawsuit or claim. It provides coverage for legal expenses, settlements, and judgments.
- Compliance with legal requirements: Some industries and professions have legal requirements for businesses to carry liability insurance. For example, healthcare providers, contractors, and manufacturers often need to meet specific insurance requirements to operate legally.
- Peace of mind: Liability insurance provides business owners with peace of mind, knowing that they are financially protected if something goes wrong. It allows them to focus on running their business without worrying about potential liabilities.