What does liability insurance cover?

Liability insurance primarily covers claims of injury or damage that the insured may cause to other people or their property. This means that if someone files a lawsuit against the insured for bodily injury or property damage, liability insurance can help cover the related legal expenses and any settlements or judgments that arise.

This type of insurance is crucial for individuals and businesses alike, as it offers financial protection against lawsuits that can significantly impact one's financial stability. The focus is on covering claims made by third parties, ensuring that the insured is not personally liable for such expenses beyond their financial capacity.

In contrast, the other options address different aspects of insurance coverage. Medical expenses for the insured fall under health or personal medical insurance, theft of personal property is typically covered by homeowners or renters insurance, and protection against natural disasters would generally be provided by specific policy riders or separate insurance policies dedicated to those events, rather than through liability insurance.