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Liability insurance provides the insured party with protection against claims resulting from injuries and damage to people and/or property. Liability insurance is a part of the general insurance system of risk financing to protect the purchaser from the risks of liabilities imposed by lawsuits and similar claims and protects the insured if the purchaser is sued for claims that come. Liability insurance is a part of the general insurance system of risk financing to protect the purchaser (the "insured") from the risks of liabilities imposed by. Liability insurance is a type of coverage that helps pay for another person's medical expenses. Liability coverage may provide you with financial protection in case you're found liable for someone else's medical bills or property repairs. Liability insurance protects you against financial loss if your actions, your negligence or the condition of your property is found to cause a person to be injured or.