Liability insurance is essential for individuals who may be held legally responsible for causing harm to others or damaging their property. This type of insurance, often referred to as third-party liability insurance, provides coverage for such situations.

However, it does not extend to willful or unlawful actions, even if the insured party is found legally liable. Liability insurance is crucial for anyone who operates a vehicle, practices medicine, or law, or is otherwise at risk of being sued for damages or injuries. The policy protects both the insured and third parties who may suffer due to the policyholder’s unintentional negligence.