What does liability insurance primarily cover?

Liability insurance primarily covers the legal obligations for damages incurred by the insured to other parties. This means that if the insured is found legally responsible for causing injury or damage to someone else, liability insurance provides coverage for the costs associated with those claims. This can include legal fees, medical expenses of the injured party, and any settlements or judgments that may arise from the incident.

Understanding the focus of liability insurance is crucial for individuals and businesses, as it helps shield them from financial loss that could occur due to lawsuits or claims resulting from their actions or negligence. This is particularly important in various contexts, such as personal liability situations, professional liability for businesses, and product liability for manufacturers, where damages to third parties can lead to significant financial repercussions.

The other options, while related to various types of insurance, do not capture the essence of what liability insurance is designed to protect against. For example, coverage of loss or damage to the insured's property pertains more to property insurance rather than liability. Similarly, coverage for medical expenses for the insured is typically part of health insurance or personal injury protection, and "all risks associated with owning property" suggests a much broader protection than what liability insurance provides.