Differentiate among three types of liability insurance. What will be

QUESTION

Differentiate among three types of liability insurance.

What will be an ideal response?

ANSWER

Answer: (1) Public liability insurance protects the business against business risks associated with the company’s property or employees. (2) Product liability insurance protects the business when someone claims its product caused damage, injury, or death. (3) Professional liability insurance protects the business when someone claims its professional services caused injury or harm.
Explanation: As examples, if a customer slips on the poorly maintained front steps of your building or is mistreated by one of your employees, public liability insurance will cover the customer’s medical expenses or legal damages. American toymakers that imported toys made in China that turned out to contain child-hazardous levels of lead have been sued by consumers for product liability. Dentists and doctors have to carry professional liability insurance (called malpractice insurance), as do lawyers, accountants, engineers, and even hairstylists.