What does liability insurance primarily cover?

Liability insurance primarily covers both property damage and bodily injury caused to others in the event of an accident or incident. This type of insurance is designed to protect the insured party from the financial consequences of their actions that result in harm to other people or their property.

In the case of bodily injury, this coverage will typically pay for medical expenses, legal fees, and any settlements or awards given to an injured party due to negligence. For property damage, it covers the costs associated with repairing or replacing someone else's property that has been damaged by the insured party, whether it be a vehicle in an accident or a person’s property due to an incident involving the insured.

This comprehensive nature of liability insurance is a critical aspect, as it ensures that individuals can comply with legal requirements and protect their financial well-being when facing claims from others. Other options provided either limit coverage solely to bodily injury or property damage or incorrectly suggest a more extensive scope than what liability insurance typically encompasses.