With regards to Liability insurance, which is CORRECT?

• A. Designed to protect the insured against claims for which they are legally liable.
• B. Insurer will pay all claims made by third party for damages claimed.
• C. Will pay for damages to the insured's and third parties property.
• D. Liability claim payment can be collected only when the amount has been established

Answer: (A)

Liability insurance protects you when you’re legally at fault for harming someone else. It covers claims for bodily injury or property damage that the insured is found liable for, and it includes defending you in those claims and paying covered damages up to the policy limits. It does not insure the insured’s own property losses, and it doesn’t guarantee payment of every third-party claim regardless of fault. It also isn’t limited to payments only after a fully established damage amount in every case; once liability is proven or admitted within the policy terms, covered claims up to limits are paid. That’s why this option is correct.