What does liability insurance typically cover?

Liability insurance is designed to protect individuals and organizations from the financial repercussions of being held legally responsible for harm caused to others. This includes covering legal costs incurred when a lawsuit is filed against the insured. Legal expenses can encompass a variety of costs associated with defending against claims, such as attorney fees, court costs, and settlements or judgments awarded to the other party if the case does not resolve in favor of the insured.

The other options focus on different areas of insurance coverage. For example, personal property damage involves protection for one's own assets rather than the liability for causing damages to someone else's property, which is what liability insurance addresses. Insurance premiums for other types of policies do not relate to liability coverage; rather, they pertain to the cost of maintaining various insurance policies. Lastly, health-related expenses typically fall under health insurance, not liability insurance, which is focused on legal responsibilities and resulting financial obligations.