What does liability coverage provide to the insured?

Liability coverage is designed to protect the insured from claims made by third parties for injuries or damages for which the insured is found legally responsible. This type of coverage is essential in various contexts, such as personal liability insurance, general liability insurance for businesses, or even auto liability coverage. It provides financial support for legal defense costs and any potential settlements or judgments, allowing the insured to avoid significant out-of-pocket expenses in the event of a lawsuit.

The other options refer to different types of insurance. Theft protection pertains to property insurance; medical expenses for the insured fall under health or personal injury protection; and compensation for lost income due to accidents relates more closely to income protection or disability insurance. These areas of coverage address separate risks and do not encompass the function of liability coverage, which specifically focuses on third-party claims.