Very simply, business liability insurance protects you against any damages that you are responsible for causing.

The types of damage and coverages vary but the most common are property damage, bodily injury, personal injury (including libel & slander) and advertising injury. It's easy to dismiss any of these and say "that will never happen to me", but even the most careful and conscientious business owner will at some point find themself being named in some type of judgement.

Even if you never do anything wrong, the cost to simply defend yourself and prove your innocence can be from tens of thousands of dollars to many times that on a large claim.