What aspect does Liability Insurance primarily focus on?

Liability insurance is designed to provide protection for the insured against claims made by third parties for damages or injuries that the insured may have caused. The primary focus is on compensating those third parties for their losses, which can include property damage, bodily injury, or personal injury. This is crucial for individuals and businesses because it helps to shield them from the financial burden that can arise from legal claims or lawsuits stemming from their actions or negligence.

For instance, if a person accidentally damages someone else's property or causes a car accident, liability insurance would cover the costs associated with those damages, ensuring that the affected third party receives compensation. This focus on protecting against third-party claims is what differentiates liability insurance from other types of insurance that protect the insured's own property, cover employee wages, or manage health expenses.