In homeowner forms, coverage E - personal liability applies to which situation?

Coverage E - personal liability in homeowner forms is designed to provide protection for the insured against personal liability claims. This coverage applies when the insured is found legally responsible for causing bodily injury or property damage to a third party.

The correct answer relates to the defense costs associated with legal claims. If a suit is brought against the insured that is groundless, false, or fraudulent, Coverage E extends to cover the costs of defending against such claims. This is significant because it emphasizes that the policy not only covers actual damages for which the insured is liable but also offers financial support for legal defenses, regardless of the validity of the claims.

In contrast, options focusing on a trespasser's injury, business activities, and damage to a resident’s property do not fall under the scope of Coverage E. Coverage for injuries to a trespasser might be limited or controlled under different provisions, business activities are typically handled under different forms of coverage, and damage to property owned by the insured does not fall under liability coverages but rather under property coverage in the policy.