What is "liability insurance"?

Liability insurance is designed to provide protection against claims arising from injuries or damage that you may cause to other people or their property. This type of insurance is particularly important as it helps individuals and businesses manage the financial risks associated with legal claims resulting from accidents, negligence, or failures to act.

For example, if someone is injured on your property, or if you accidentally cause damage to someone else's property, liability insurance can help cover the costs of legal fees, medical expenses, and any settlements or judgments. This form of insurance does not protect your own property or personal assets directly, but rather focuses on the responsibility towards others and the costs incurred as a result of your actions or the situations in which you find yourself responsible.

The other options focus on different types of coverage: one solely addresses personal asset protection, another concerns operational risks specific to businesses, and one relates to theft of property, whereas liability insurance encompasses a broader scope aimed specifically at claims related to injury and property damage.