What is the primary purpose of liability insurance?

The primary purpose of liability insurance is to cover legal costs and damages that arise from claims made against the insured for negligent actions or wrongful acts. This type of insurance is designed to protect individuals and businesses from financial losses resulting from lawsuits or claims that seek compensation for damage to third-party property or injuries sustained by third parties.

When an insured individual is held responsible for causing harm or damage, liability insurance helps to cover the costs associated with legal defense, court fees, and any settlements or judgments that may be awarded to the lawsuit's plaintiff. This financial protection is essential, as legal disputes can lead to significant expenses that may exceed the insured's personal resources.

In contrast, the other choices emphasize different aspects of coverage not primarily related to liability. While protecting personal property, covering medical expenses, and providing income replacement are all important in their own right, they do not address the fundamental role that liability insurance plays in safeguarding against the financial consequences of legal claims.