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Liability insurance would pay if you were liable (responsible) for damages. For example, most automobile insurance includes liability insurance, for when you are responsible for damage to someone else's vehicle.

Generally, liability insurance allows you to pay a fixed, relatively small amount on a regular basis, rather than suddenly and unexpectedly having to pay a very large amount all at once.

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Q: Why does anyone need liability insurace?
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Liability insurace (in case you damage something or hurt someone) and, if you have enough employees, Worker's Compensation insurance to cover your workers that get hurt on the job.


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