: The irony of this is that having liability insurance may actually
: make you more likely to be sued, as there is a potentially large
: pay-off for the plaintiff and attorney (the pay-off for the
: attorney is always the key). A business with only a few hundred
: or few thousand dollars in assets is not a very tempting target
: for attorneys, but a million-dollar liability policy changes the
: dynamic dramatically.

: I guess the bottom line is that if you're in business, you need
: liability insurance.

I talked to my lawyer about this, and he disagrees. In his experience, liability insurance helps more often than hinders. The point of having it is that suddenly, the insurance company has skin in the game. If you have any assets (home equity, paid off cars, land), a plaintiff's lawyer can use it as leverage. Balance a request for a $5K settlement vs $5K legal fees + the potential for a big judgment. He said you'd much rather have the lawyers on the insurance company's dime.

The other example he gave were hitting the policy limits on homeowner's or automotive liability coverage ($1MM per accident sounds like a lot, until you look at medical bills for a year in a coma, or lifetime care).

Talk to your lawyer. Be sure that any liability policy covers business/professional liability. Mine is an "excess liability" policy that pays after homeowners/automotive liability, includes professional liability, and costs about $150 / year.