Do I need liability insurance?

UPDATED: Jul 13, 2023Fact Checked

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Jeffrey Johnson

Insurance Lawyer

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Insurance Lawyer

Mary Martin

Published Legal Expert

Mary Martin has been a legal writer and editor for over 20 years, responsible for ensuring that content is straightforward, correct, and helpful for the consumer. In addition, she worked on writing monthly newsletter columns for media, lawyers, and consumers. Ms. Martin also has experience with internal staff and HR operations. Mary was employed for almost 30 years by the nationwide legal publi...

Published Legal Expert

UPDATED: Jul 13, 2023

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UPDATED: Jul 13, 2023Fact Checked

Basic liability coverages such as provided in business owners’ policies may be adequate in many cases, But if you are in a business or profession where there is an especially high risk of lawsuits (some branches of medicine for example) you may need extra protection.

Case Studies: Liability Insurance

Case Study 1: Medical Professional

Dr. Johnson, a renowned surgeon, faces a lawsuit from a patient who claims to have suffered severe complications due to a surgical procedure. The patient alleges medical negligence and seeks substantial compensation for medical expenses and emotional distress.

Dr. Johnson, despite having comprehensive malpractice insurance, discovers that the claim exceeds the limits of his coverage. Without additional liability protection, he faces the possibility of personal financial ruin.

Case Study 2: Construction Company

Smith Construction, a reputable construction company, is hired to build a residential complex. Unfortunately, during the construction process, a structural defect leads to a partial collapse of the building, resulting in injuries to several workers and significant property damage.

The affected workers and property owners file lawsuits against Smith Construction, claiming negligence and seeking compensation for medical bills, lost wages, and property repairs.

Without sufficient liability insurance, Smith Construction faces substantial financial liabilities that could jeopardize the company’s existence.

Case Study 3: E-commerce Business

Electronics company, an online retailer of electronic devices, experiences a data breach that compromises the personal and financial information of thousands of customers.

The affected customers file a class-action lawsuit against Electronics company, alleging inadequate data security measures and seeking damages for identity theft and financial losses.

Without robust cyber liability insurance, Electronics company may be responsible for significant legal expenses, settlements, and reputational damage.

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Jeffrey Johnson

Insurance Lawyer

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Insurance Lawyer

Mary Martin

Published Legal Expert

Mary Martin has been a legal writer and editor for over 20 years, responsible for ensuring that content is straightforward, correct, and helpful for the consumer. In addition, she worked on writing monthly newsletter columns for media, lawyers, and consumers. Ms. Martin also has experience with internal staff and HR operations. Mary was employed for almost 30 years by the nationwide legal publi...

Published Legal Expert

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

Free Insurance Quote Comparison

Enter your ZIP code below to compare cheap insurance rates.

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