Which of the following is a characteristic of liability insurance?

The characteristic of liability insurance that is highlighted in this choice is its primary function to protect against legal claims made by others. Liability insurance is specifically designed to cover the costs associated with legal claims resulting from injuries or damages that the policyholder is responsible for causing to another individual or their property. This type of coverage is essential for safeguarding individuals and businesses against potential lawsuits and the financial fallout that can arise from such legal actions.

Understanding this characteristic helps to clarify the fundamental purpose of liability insurance within the broader context of insurance products. It distinguishes liability coverage from other types of insurance, which may focus on protecting one’s own property or health expenses. For instance, coverage for physical damage to your own vehicle pertains to comprehensive or collision insurance rather than liability. Similarly, high deductibles are more commonly associated with various types of property insurance, and personal health benefits correspond to health insurance policies, not liability insurance. This context reinforces why liability insurance is uniquely focused on shielding the insured from third-party claims, thereby providing critical financial protection.