Which insurance type provides compensation for harm or wrong done to others that the insured is legally obligated to pay?

Which insurance type provides compensation for harm or wrong done to others that the insured is legally obligated to pay?

• A. Property Insurance
• B. Casualty or Liability Insurance
• C. Life Insurance
• D. Health Insurance

Answer: (B)

Liability coverage protects you against the financial consequences of causing harm or damage to others and being legally obligated to pay for it. This is the essence of casualty or liability insurance: it covers third-party claims—bodily injury, property damage, and the legal defense costs—that arise from your actions, up to the policy limits. For example, if you’re at fault in a car accident and injure someone, liability insurance pays the other person’s medical and repair bills and can cover your defense in a lawsuit. This differs from other types of coverage: property insurance focuses on damage to your own property, life insurance pays a death benefit to beneficiaries, and health insurance covers medical expenses for you.

Liability coverage protects you against the financial consequences of causing harm or damage to others and being legally obligated to pay for it. This is the essence of casualty or liability insurance: it covers third-party claims—bodily injury, property damage, and the legal defense costs—that arise from your actions, up to the policy limits. For example, if you’re at fault in a car accident and injure someone, liability insurance pays the other person’s medical and repair bills and can cover your defense in a lawsuit.

This differs from other types of coverage: property insurance focuses on damage to your own property, life insurance pays a death benefit to beneficiaries, and health insurance covers medical expenses for you.