What is the primary purpose of 'liability coverage' in insurance?

The primary purpose of liability coverage in insurance is to shield the insured from legal liabilities that arise from injuries or damages caused to third parties. This type of coverage is essential as it helps pay for legal defense costs and any settlements or judgments that may result from claims against the insured. For instance, if an individual is held responsible for an accident that injures someone else or damages their property, liability coverage ensures that the financial burden of legal claims does not fall on the insured.

In contrast, other types of coverage, such as property coverage, primarily relate to damage to one's own belongings. Theft and vandalism coverage addresses specific threats to personal property but does not provide protection against claims made by others. Medical coverage is focused on health-related expenses for the insured or others rather than any legal repercussions stemming from incidents for which the insured may be held liable. Thus, liability coverage is specifically designed to address the financial implications of legal responsibilities rather than other forms of risk.