What is a common feature of liability insurance?

Liability insurance is primarily designed to protect individuals and businesses from claims resulting from injuries and damage to other people or their property. The fundamental feature of liability insurance is that it provides protection against claims of negligence, which can arise when someone is held legally responsible for harm caused to another individual, whether it's through direct action or failure to act (e.g., not maintaining a safe environment).

This coverage is essential because it not only helps cover legal defense costs but also pays for settlements and judgments if a policyholder is found liable for damages. This aspect of liability insurance is crucial, as it helps individuals and businesses manage the financial risks associated with lawsuits and claims made against them.

In contrast, some other options do not accurately reflect the nature of liability insurance. For instance, liability insurance does not exclusively cover property damage; it also addresses bodily injury and personal injury claims. It is not automatically included in all insurance policies, as it must be purchased separately. Lastly, liability insurance does require the payment of premiums to maintain coverage, which is essential for the insurer to provide the necessary protection.