What does liability insurance cover?

Liability insurance specifically protects the policyholder from the financial risks associated with legal responsibilities for damages or injuries they may cause to other individuals or their property. This coverage typically includes situations where the insured might be found legally liable for injuries, medical expenses, or damages that occur as a result of their actions or negligence.

For instance, if a policyholder accidentally causes an accident that injures someone else or damages their property, liability insurance provides the financial support to cover the claims made against them, including legal fees if necessary. This aspect of liability insurance is crucial as it provides peace of mind and protection against potentially devastating financial consequences resulting from lawsuits or insurance claims.

The other options represent scenarios that do not fall under the scope of liability insurance, such as personal injuries suffered by the policyholder themselves, damage to property from natural disasters, or loss of income due to unemployment. Each of these circumstances requires different kinds of insurance coverage tailored to those specific risks.