Learn more about Liability Insurance with DeshCap. Our content is independent of any insurance broker, company, or lobbyist and we strive to democratize risk and insurance knowledge worldwide. Most individuals and businesses underestimate the function of liability insurance as they only look at long tail scenarios of liability risk, and most of what they know is a function of what is communicated to them by insurance brokers, agents, companies, and lobbyists.
Liability insurance can have meaningful impacts on a business and its investors if its reworded to match the core risks of a specific business. This has a direct impact on profits margins, and in turn investor annual returns. In fact, institutional investors such as private equity firms benefit substantially from incorporating insurance within their operations and investments. Learn about risk-adjusted IRR.
The above video is a a clip from the Documentary 'The Men Who Built America', which was originally broadcast on the History Channel in the Fall of 2012. It shows the importance of liability insurance that would pay out effectively in the event of a lawsuit even if the business is not at fault. Defence costs alone can have a large impact on a company's cash flows with the potential of leading it to bankruptcy. The video shows negotiations between George Westinghouse and J.P. Morgan. At the time, Westinghouse did not have liability insurance. But if he did would negotiations have changed? If negotiations had changed, would that have changed the course of American business throughout time? History tells us that any company with sizeable or high quality assets, including patents, has to protect them properly, along with protecting directors and officers and investors.