In Coverage E of the Comprehensive Personal Liability, the insurer's liability is limited to what?

In Coverage E of the Comprehensive Personal Liability policy, the insurer's liability primarily encompasses the limit stated in the declaration of the policy. However, it also includes additional amounts for costs associated with the defense of a claim, as well as any interest that accumulates on the judgment. This means that not only is there a preset cap on the insured's liability, but should a legal action occur, the insurer is responsible for covering the legal fees involved in defending against the claim up to the limit. This comprehensive approach ensures that policyholders are adequately protected from large legal expenses that may arise due to liability claims.

The importance of this coverage lies in its capacity to not only protect against potential judgments but also to ensure that defense costs do not erode the limit of coverage available for actual liability. Thus, while the base limit offers a threshold, the inclusion of legal costs and interest provides broader protection.