Traditionally, liability business insurance policies have been designed to protect your company from any loss caused by it or its employees. As it would be expected, a liability business insurance policy is expected to cover any damage that has occurred during the policy period, and the insurance company is responsible for handling all claims.
Liability business insurance also has provisions for claims that are made way after the coverage period has ended, as long as the claim is related to the period of coverage. For example, if you are an architect and you have designed a house for someone who has made a claim against you a few years after the house is finished, your liability business insurance is likely to cover you even then. However, one must note that some kinds of damages or losses are not covered under liability business insurance and they typically relate to aspects, such as injury to workers, damage to property or automobile liability, to name a few.
Even if you are a small business owner, it makes sense for you to purchase liability business insurance, as it may save you from unexpected and unfortunate situations that may arise while undertaking your business.