What does ‘liability insurance’ primarily cover?

Liability insurance primarily covers legal obligations to pay damages resulting from bodily injury or property damage to third parties. This type of insurance is designed to protect individuals and businesses from the monetary consequences of their actions or negligence that cause harm to others. For example, if someone is injured on your property or if you accidentally damage someone else's belongings, liability insurance can help cover the costs associated with legal claims or settlements.

Other options do not align with the core purpose of liability insurance. Damage to your own property pertains to property insurance rather than liability coverage. Coverage for lost wages is often associated with disability or workers' compensation insurance, which is different from liability. Lastly, health-related expenses for the insured fall under health insurance, not liability, which focuses on addressing claims made by third parties.