What does liability insurance cover?

Liability insurance is specifically designed to provide coverage for financial losses arising from legal liabilities incurred by the policyholder. This means that if you're found legally responsible for causing harm to another person or their property, liability insurance will help cover the costs associated with legal claims, including settlements, judgments, or legal defense expenses.

This type of insurance focuses on protecting you from claims made by others, covering scenarios such as bodily injury to a third party or damage to someone else's property due to your actions. It does not cover damage to your own property, your own injuries, or theft of personal belongings, which are typically covered under other types of insurance policies such as homeowners or auto insurance. Thus, the answer reflects the core function of liability insurance, which is to provide financial protection against claims made by others due to your liabilities.