What does liability insurance generally cover?

LIABILITY INSURANCE covers the insured's LEGAL RESPONSIBILITY for harm they cause to OTHERS (third parties). It covers: BODILY INJURY and PROPERTY DAMAGE to third parties; the cost of legal DEFENSE (the insurer's duty to defend); and DAMAGES the insured is legally obligated to pay (up to policy limits). It does NOT cover the insured's own property or injuries (those are first-party coverages). THIRD-PARTY coverage: Liability protects against claims by others; the injured third party is not a party to the policy but benefits from it.

Duty to defend: Usually broader than the duty to indemnify — the insurer must defend even groundless suits within coverage. Casualty insurance centers on liability — the legal obligation to pay for harm to others; understanding what liability coverage includes (third-party injury/damage, defense, damages) is fundamental casualty insurance knowledge.