What is the main purpose of liability insurance?

The main purpose of liability insurance is to cover costs incurred from legal claims made against the insured. This type of insurance provides financial protection to the policyholder in the event that they are held responsible for causing injury or damage to another person or their property. It not only covers legal fees associated with defending against such claims but also pays for any settlements or judgments that may arise from those claims.

Liability insurance is crucial for individuals and businesses alike, as it helps safeguard their financial well-being by shielding them from potentially devastating legal expenses. This coverage is particularly important because lawsuits and legal claims can arise unexpectedly, and the costs associated with defending against these claims can quickly escalate. Therefore, the essential function of liability insurance is to provide the insured with a level of security and peace of mind regarding their financial exposure in these situations.

The other options focus on different types of insurance or coverage that do not align with the primary purpose of liability insurance. Theft protection, property damage coverage, and insuring personal belongings are generally handled by other types of insurance policies, such as homeowners or renters insurance, rather than under liability insurance.