What is the primary function of liability coverage in property insurance?

Liability coverage within property insurance is designed primarily to protect the insured from financial loss resulting from claims made by other individuals due to injuries or damages that the insured is legally responsible for. This means that if someone is injured on the insured's property or if the insured accidentally damages someone else's property, liability coverage will help cover the associated legal costs, medical expenses, or property damage claims.

This coverage is crucial because it ensures that the insured can defend themselves against lawsuits or claims without facing the full financial burden out-of-pocket. It is particularly important for business owners and property owners, as they may be exposed to greater risks related to injury or property damage. The other options, while they address important aspects of property coverage, do not focus on the specific protective function of liability coverage as it pertains to third-party claims.