What type of coverage obligates the insurer to defend lawsuits filed against the insured?

Liability coverage is designed specifically to provide protection for the insured in situations where they are held legally responsible for injury or damage to others. This type of coverage not only pays for damages that the insured may owe as a result of claims made against them, but it also obligates the insurer to defend the insured in legal proceedings arising from those claims. This means that if a lawsuit is filed asserting that the insured is responsible for an accident or incident that caused injury or damage to a third party, the insurer is required to provide legal defense and potentially cover any settlements or judgments up to the limits of the policy.

Collision coverage, on the other hand, specifically pertains to damage to the insured's own vehicle resulting from a collision, and does not address liability or legal defense. Theft coverage protects against loss due to theft of property but also does not encompass legal defense obligations. Property coverage deals with damage to or loss of tangible assets, such as homes or personal belongings, and similarly does not include provisions for defending against lawsuits. Thus, liability coverage is distinct in that it encompasses both financial protection in the event of a lawsuit and the insurer's responsibility to provide legal defense.