What is the primary purpose of liability insurance?

Liability insurance is designed specifically to protect individuals and businesses from the financial consequences of claims that arise due to injuries or damages they may cause to others. This includes legal defense costs and any settlements or judgments that may result from lawsuits. For instance, if someone is accidentally injured on your property, liability insurance would help cover the associated costs and legal fees, thereby providing financial protection.

The alternatives focus on other aspects of insurance. For example, covering theft of property pertains to property insurance rather than liability. Timely payment of premiums is a requirement for maintaining coverage but does not reflect the purpose of liability insurance itself. Lastly, while covering medical expenses for the insured relates to health or personal injury insurance, it does not address the protective function of liability insurance regarding third-party claims. Thus, the primary focus of liability insurance remains on safeguarding against claims related to injuries or damages caused by the insured.