Just one example of why you might meed a public liability insurance quote. This video from the 1996 movie “Striptease” – based on the Carl Hiassen novel -shows Ving Rhames (and Demi Moore, of course) plotting a fraudulent business liability lawsuit. The mere fact that something like this could happen is the reason you need to understand business liability insurance. The following description gives a good overview and is from Wikipedia:

“Liability insurance is a part of the general insurance system of risk financing to protect the purchaser (the “insured”) from the risks of liabilities imposed by lawsuits and similar claims. It protects the insured in the event he or she is sued for claims that come within the coverage of the insurance policy.

The modern system relies on dedicated carriers, usually for-profit, to offer protection against specified perils in consideration of a premium

Liability insurance is designed to offer specific protection against third party claims, i.e., payment is not typically made to the insured, but rather to someone suffering loss who is not a party to the insurance contract. In general, damage caused intentionally as well as contractual liability are not covered under liability insurance policies. When a claim is made, the insurance carrier has the duty (and right) to defend the insured. The legal costs of a defense normally do not affect policy limits unless the policy expressly states otherwise; this default rule is useful because defense costs tend to soar when cases go to trial.

In many countries, liability insurance is a compulsory form of insurance for those at risk of being sued by third parties for negligence…

The most usual classes of mandatory policy cover the drivers of vehicles, those who offer professional services to the public, those who manufacture products that may be harmful, constructors and those who offer employment.

The reason for such laws is that the classes of insured are deliberately engaging in activities that put others at risk of injury or loss.

Public policy therefore requires that such individuals should carry insurance so that, if their activities do cause loss or damage to another, money will be available to pay compensation.

In addition, there are a further range of perils that people insure against and, consequently, the number and range of liability policies has increased in line with the rise of contingency fee litigation offered by lawyers (sometimes on a class action basis). Such policies fall into three main classes: Public Liability, Product Liability, Employers Liability.

Most businesses will go to a liability insurer for a Commercial General Liability policy, and to a specialized workers’ comp insurer for a workers’ comp policy (which is usually compulsory unless the employer can demonstrate the capability to self-insure for workers’ comp).

Many of the public and product liability risks are often covered together under a general liability policy. These risks may include bodily injury or property damage caused by direct or indirect actions of the insured.

In the United States, general liability insurance coverage most often appears in the Commercial General Liability policies obtained by businesses, and in homeowners’ insurance policies obtained by individual homeowners.

Generally, liability insurance covers only the risk of being sued for negligence or strict liability torts, but not any tort or crime. This is usually mandated either by the policy language itself or case law or statutes in the jurisdiction where the insured resides or does business.

In other words, liability insurance does not protect against liability resulting from crimes or intentional torts committed by the insured. This is intended to prevent criminals, particularly organized crime, from obtaining liability insurance to cover the costs of defending themselves in criminal actions brought by the state or civil actions brought by their victims. A contrary rule would encourage the commission of crime by allowing criminals to insure themselves from adverse consequences of their own actions. ”

Here is the source:Wikipedia