What does liability insurance protect against?

Liability insurance is designed to provide protection against claims of negligence that result in injury or damage to other individuals or their property. This type of coverage is particularly important for professionals, such as real estate agents, who may be held responsible for accidents or issues that arise while conducting business.

For instance, if a client were to suffer an injury during a property showing due to the agent's actions (such as not properly ensuring a stairway is safe), the liability insurance would help cover legal fees, medical costs, and potential settlements that may arise from a lawsuit. This ensures that the professional is not financially devastated by a claim and can continue to operate their business.

Loan defaults, property taxes, and natural disasters are not covered by liability insurance. Loan defaults pertain to financial obligations that fail to be met and would typically require different types of insurance or financial management strategies. Property taxes are a government obligation that individuals must pay based on property ownership, while natural disasters might necessitate other forms of insurance, such as property insurance or flood insurance, rather than liability insurance.