What does liability coverage protect against in personal lines insurance?

Liability coverage is a critical component of personal lines insurance that specifically protects individuals against claims of bodily injury or property damage that they may cause to others. This type of coverage usually comes into play when an insured individual becomes legally obligated to pay for damages due to their negligent actions or unintentional harm caused to another person or their property.

For instance, if a person accidentally injures someone else during a recreational activity or if their pet causes damage to a neighbor's property, liability coverage would help cover the legal expenses and any compensation that the insurer must pay as a result of the claim. This coverage is essential for protecting one's financial interests and assets from legal claims that can arise in everyday situations.

The other options do not align with the purpose of liability coverage, which is focused on third-party claims arising from accidents rather than personal losses or theft.