What is liability insurance?

Liability insurance is designed to protect individuals and organizations from claims resulting from injuries and damage caused to others. This type of insurance covers legal costs and payouts for which the insured would be responsible if found legally liable for an incident, such as a car accident where the insured is at fault or an injury that occurs on their property.

This coverage can be crucial for safeguarding one's financial assets, as it helps cover the costs associated with lawsuits or settlements that arise from claims made against the insured. It serves as a protective barrier, ensuring that the insured does not suffer financially due to unexpected legal claims from third parties.

The other options, while they describe different types of insurance, do not capture the essence of liability insurance. For example, protection against theft and vandalism pertains more to property insurance, while covering damages to one's own property relates to different types of coverage, such as homeowners or auto insurance. Insurance specific to medical professionals is often categorized under malpractice insurance or professional liability insurance, not general liability coverage.