What does liability insurance primarily protect against?

Liability insurance primarily protects individuals and businesses against claims from third parties. This means that if someone suffers injury or property damage due to the actions of the insured party, liability insurance covers the costs associated with legal claims, settlements, or court judgments made against them.

This type of insurance is designed to provide financial security for the policyholder in case they are held liable for causing harm or damage to another person. It helps cover both legal defense costs and any damages that might be awarded to the claimant, making it an essential component of risk management for individuals and businesses alike.

In contrast, other options do not accurately represent the primary focus of liability insurance. Loss of personal property pertains more to property insurance, while natural disasters are typically covered under specific policies like homeowners or flood insurance. Workplace injuries are generally addressed through workers' compensation insurance, which is a distinct form of coverage designed to protect employees in the event of job-related injuries or illnesses.