What does liability coverage in a property policy typically provide?

Liability coverage in a property policy is designed to protect the policyholder from legal and financial repercussions resulting from injuries or damages caused to others. This type of coverage generally includes the costs associated with legal defense and any potential settlements or judgments that arise from lawsuits related to bodily injury or property damage to third parties. This aspect of liability insurance is critical for protecting the insured from unexpected claims that can arise from incidents occurring on their property or due to their actions.

The other options do not align with the primary purpose of liability coverage. Property damage by the policyholder relates more closely to personal liability exposure rather than coverage provided by liability insurance. Coverage for theft of personal items typically falls under a homeowners or renters’ policy but is not part of liability coverage. Damage caused by natural disasters is covered under specific property insurance policies and is not related to liability coverage, which focuses on third-party claims.