What is the difference between 'Liability Insurance' and 'Property Insurance'?

Liability insurance is designed to provide coverage for claims made against the insured due to injuries or damages caused to third parties. This means if someone is harmed or if their property is damaged and the insured is found liable, the liability insurance will cover the costs associated with those claims, such as legal fees and settlements or judgments.

On the other hand, property insurance specifically protects the insured's own property against loss or damage. This can include coverage for physical assets like buildings, equipment, or personal belongings due to perils such as fire, theft, or vandalism.

Understanding this distinction is crucial, as it addresses the scope and types of coverage each insurance provides. Liability insurance focuses on protecting against claims from others, while property insurance is centered on safeguarding the insured's own possessions. This differentiation helps individuals and businesses determine the necessary types of insurance to purchase based on their unique risks and needs.