Also called third-party insurance, it’s a fundamental part of your risk management system. It protects your organization from the risks of liabilities from lawsuits and protects the insured in the event they’re sued for claims that fall within the coverage parameters of the insurance policy. Damage caused intentionally and contractual liability aren’t covered under liability insurance policies as it provides coverage for legal fees, which can be quite expensive. This is particularly useful in “nuisance” lawsuits.