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Liability Protection and Taxes

Is liability protection more important than taxes? why?

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Please see response attached, which is also presented below. I hope this helps and take care.


1. Is liability protection more important than taxes? why?

Both are important, but because they are different in nature it is really difficult to compare the two on importance. It is kind of like comparing apples and oranges. And also, when considering the importance, it depends who you talk to (i.e., the business or the government who imposes the taxes). Let's take a closer look.

Whereas liability protection is insurance that is purchased by the business to protect the business, the state and government impose taxes to protect the country (supposedly).

Liability Protection

Liability insurance is defined as that insurance, which pays and renders service on behalf of an insured for loss arising out of her responsibility to others imposed by law or assumed by contract. The implied ...

Solution Summary

This solution explains liability protection and taxes, and whether one is considered more important than the other. The rationale is also provided.