What type of liability does liability insurance cover?

Liability insurance is designed primarily to protect individuals and businesses from claims arising out of bodily injury and property damage caused to others. This type of insurance covers the costs associated with legal defense and any settlements or judgments that may arise from these claims. When an insured party is faced with a claim due to accidentally causing bodily harm to someone or damaging someone else's property, liability insurance provides the necessary financial support to handle these responsibilities.

The coverage is broad enough to encompass a range of scenarios where the insured may become legally liable for damages, including accidents that occur on their property, injuries caused by their actions, or damages resulting from their products or services. Since many liability insurance policies are structured to specifically address bodily injury and property damage, this makes it imperative for policyholders and brokers to have a solid understanding of this coverage area.