What does liability insurance provide coverage for?

Liability insurance is specifically designed to provide coverage for injuries or damages that the policyholder may cause to other individuals or their property. This type of insurance is crucial for protecting the policyholder from legal claims and potential lawsuits that could arise from incidents where they are deemed responsible for harming someone else or damaging their property.

For instance, if a person accidentally injures another individual in a slip and fall accident or damages someone’s property, liability insurance would help cover the costs associated with those claims, including medical expenses or repair costs. This protective feature is essential in many areas of personal and business insurance, ensuring that policyholders are financially safeguarded against unforeseen events where they might be held liable.

The other options relate to different kinds of coverage. Damage to one's own property is typically covered under property insurance, while loss of income due to business interruption pertains to business income insurance. Coverage for natural disasters is usually addressed under specific disaster insurance or policies tailored for such events, rather than liability insurance.