What is the primary purpose of liability insurance?

The primary purpose of liability insurance is to protect against financial loss from claims of negligence. This type of insurance provides coverage for legal liabilities that arise from injuries to others or damage to their property due to the insured's actions or negligence. Essentially, it serves as a financial safety net, ensuring that if an insured party is found liable for causing harm or damages, the insurance will cover the costs associated with those claims, such as legal fees, settlements, or judgments.

This protection is crucial because legal claims can result in significant financial burdens, and liability insurance helps mitigate those risks. By having this coverage, individuals and businesses can operate with greater peace of mind, knowing they are safeguarded against potential lawsuits and associated financial repercussions stemming from their actions.

The other options focus on different aspects of insurance and do not capture the comprehensive coverage that liability insurance provides. For instance, limiting coverage to property damage only ignores the broader scope of liabilities that might arise, while focusing solely on legal costs or income replacement does not reflect the core intent of liability insurance, which is primarily concerned with protecting against claims of negligence.