What is the purpose of liability insurance?

Liability insurance serves the crucial purpose of protecting individuals or businesses from financial losses that may arise due to legal claims against them for injuries or damages they may have caused to others. This type of insurance is designed to cover the costs associated with legal defenses as well as any settlements or judgments that may result from such claims.

For instance, if someone is injured on a property you own or as a result of your actions, liability insurance will help cover medical expenses and any legal fees incurred in defending against the lawsuit. It provides a safety net that protects your financial assets in the event of such claims.

This coverage is essential for individuals and businesses alike, ensuring that they are not left vulnerable to significant financial burdens resulting from unforeseen accidents or negligence. It is distinct from other types of insurance, like property insurance, which focuses on covering physical assets, or other forms of coverage that might address specific operational losses rather than liability claims.