What is the primary purpose of liability insurance?

Liability insurance is primarily designed to cover legal costs and claims made against the insured party when they are found responsible for causing harm or damage to others. This type of insurance is crucial because it helps individuals and businesses manage the financial burdens associated with lawsuits or claims that arise from their actions or negligence.

In the context of liability insurance, this coverage typically includes defense costs, court expenses, and any settlements or judgments if the insured is found liable. By providing this protection, liability insurance ensures that individuals are not financially devastated by claims that may arise from everyday activities, whether related to their personal life or business operations.

While options that mention coverage for property damage, theft, or health insurance deal with different aspects of risk management, they do not encompass the primary focus of liability insurance, which is to protect the insured from legal claims and the related financial implications.