An agency our company deals with requires us to purchase Liability Insurance under our contract with them. Is Liability Insurance mandatory?

It is up to the company that you are contracting through to decide whether you need Liability Insurance. Liability Insurance is a way for a company to protect themselves in case any damages occur during the contract. It is very important that when you are negotiating your contract that you consider the need and the amount of coverage necessary. Liability Insurance is something you may want to obtain regardless of whether the contract company demands it or not.