insurance for money the policyholder is legally obligated to pay because of bodily injury or property damage caused to another person and covered in the policy. Liabilities may result from property damage, bodily injury, libel, or any other damages caused by the insured. The insurance company agrees to pay for such damages if they are awarded by a court, up to the limitations specified in the insurance contract. The insurer may also cover legal expenses incurred in defending the suit.

coverage for all sums that the insured becomes legally obligated to pay because of bodily injury or property damage, and sometimes other wrongs to which an insurance policy applies. Personal liability policies include comprehensive personal liability (CPL) , homeowners insurance policy , Personal Automobile Policy (PAP) , Personal Umbrella Liability, and the Uninsured Motorist Endorsement. Business liability policies include Business Automobile Policy (BAP) , BusinessOwners Policy , Completed Operations and Products Liability, Commercial General Liability Insurance (CGPL) Employers Liability and Workers Compensation, manufacturers and contractors liability (M&C) , owners, landlords, and tenants liability insurance policy (OL&T) Physicians, Surgeons and Dentists Professional Liability, storekeepers liability insurance Umbrella Liability Policy, and the Uninsured Motorists Coverage.

protection from claims arising from injuries or damage to other people or property. Liability protection is very important for motor vehicle, home, and business owners. Business liability insurance premiums are deductible.

protection for a property owner from claims arising from injuries or damage to other people or property.

Example: Abel slipped on a broken step on the walkway in an apartment complex owned by Baker. Baker's liability insurance pays Abel for the pain and suffering and medical expenses.