For a business, what is the primary purpose of liability insurance?

The primary purpose of liability insurance for a business is to cover costs associated with legal claims. This type of insurance is designed to protect businesses from financial loss that may arise when they are held legally responsible for injuries or damages to a third party. It can cover legal fees, medical expenses, and settlements or judgments awarded in lawsuits.

Liability insurance is crucial for businesses because it helps mitigate the risks of being sued by customers, clients, or other third parties. When businesses operate, there is always the potential for accidents, negligence, or unintentional harm that could lead to legal action. Having liability insurance in place ensures that a business is prepared to handle these situations financially, allowing them to focus on their operations without the constant worry of potential legal repercussions.

The other options, while important in their own areas, do not directly relate to the primary function of liability insurance. Coverage for property loss pertains to property insurance, protection against employee theft relates to crime insurance, and losses from natural disasters are typically covered by specific types of property insurance such as flood or earthquake insurance.