What term describes insurance that covers a person's legal responsibilities for losses?

Liability insurance is specifically designed to provide coverage for an individual's legal responsibilities in the event that they cause harm to others or damage their property. This type of insurance can cover legal fees, settlements, or judgments that arise from lawsuits related to accidents or negligent actions.

For example, if someone accidentally causes injury to another person or damages someone else's property, liability insurance will help cover the costs associated with those losses. This is particularly important in protecting an individual's financial security, as legal claims can become quite expensive and could lead to personal bankruptcy if not insured.

Property insurance, on the other hand, covers the insured's own property against risks such as fire or theft, while health insurance focuses on medical expenses. Life insurance provides financial protection to beneficiaries after the insured individual's death. Each of these types addresses different risks and concerns, making liability insurance unique in its focus on legal responsibilities.