What does a liability insurance policy primarily cover?

A liability insurance policy is designed primarily to protect the insured against claims resulting from injuries to other people or damage to their property. This type of insurance covers legal costs as well as settlements or judgments that may arise from such claims. The main focus is on providing financial protection against the consequences of actions that lead to other parties' injuries or property damage, which can be a significant risk for individuals and businesses.

In contrast, physical damage to the insured's own property is generally covered by property insurance, while life coverage pertains to life insurance policies that provide financial benefits upon the death of the insured. Coverage for personal belongings is typically included in homeowners or renters insurance rather than liability insurance. Thus, the core purpose of liability insurance underscores its role in safeguarding the insured from financial losses arising out of their legal responsibilities towards others.