What is the primary function of liability insurance?

The primary function of liability insurance is to protect against claims resulting from injuries and damage to people or property. This form of insurance is designed to cover legal costs and any settlements or judgments that may arise from lawsuits brought against the insured due to their actions or negligence that result in harm or damages to others.

For example, if someone is injured on your property or due to your actions, liability insurance would help cover the costs associated with their medical expenses, lost wages, and potential legal fees. This type of insurance is crucial for individuals and businesses as it helps mitigate financial risks associated with unpredictable events that could lead to significant liabilities.

The other options focus on specific types of coverage that do not relate to liability insurance. Medical expenses pertain to health insurance, while coverage for theft, vandalism, and natural disasters falls under property insurance. Thus, the essence of liability insurance is its focus on protecting the insured against the financial repercussions of claims made by third parties.