In terms of liability coverage, how does "duty to defend" benefit the insured?

The correct answer highlights the essential aspect of liability coverage known as the "duty to defend." This obligation means that the insurance company is responsible for providing a legal defense for the insured against claims made in a lawsuit, regardless of the merit of those claims. This benefit is crucial because legal defenses can be costly and complex, and defending against allegations can significantly impact an individual's or business's financial stability if they have to pay these expenses out of pocket.

Liability coverage's "duty to defend" also serves to alleviate the burden of legal complexities, allowing the insured to focus on their personal or business affairs while the insurer takes on the responsibility of managing the defense. This feature of liability insurance ensures that the insured receives professional legal representation, which is especially important in navigating the intricacies of legal claims and court procedures.

By having the insurer handle the defense, the insured is not only protected from immediate financial strain but also has access to legal expertise that can enhance their chances of a favorable outcome in any litigation.