Liability Insurance

Liability insurance is a type of insurance designed to protect the insured (the policyholder) from financial loss if they are found legally responsible for causing injury or property damage to a third party. It covers the costs associated with claims or lawsuits brought by others who suffer harm due to the insured's negligence or actions.

Key features of liability insurance include:

• Third-party coverage: It pays damages or compensation to someone other than the insured, i.e., the injured party or claimant, not the insured themselves.
• Coverage scope: It typically covers bodily injury (medical expenses, lost wages, pain and suffering) and property damage (repair costs, replacement, legal fees).
• Legal defense: The insurer usually provides and pays for the legal defense of the insured if a claim is made, which can be a significant benefit since legal costs can be high.
• Exclusions: Intentional damage and contractual liabilities are generally not covered.

Liability insurance is common in various contexts, such as auto insurance (required in most states), business insurance, and homeowners insurance, providing financial protection against lawsuits and claims arising from accidents or negligence.

In summary, liability insurance safeguards the insured from the financial consequences of legal responsibility for harm caused to others, covering damages and legal costs related to third-party claims.