What does liability coverage in a property insurance policy protect against?

Liability coverage in a property insurance policy specifically protects against claims for bodily injury or property damage to others. This type of coverage is essential as it provides financial protection in the event that the insured is held legally responsible for causing harm to another person or their property. It covers legal costs, medical expenses, and any damages awarded in a lawsuit up to the limit specified in the policy.

The other options focus on different types of insurance needs. Losses related to theft of personal items typically fall under personal property coverage rather than liability. Damage caused by natural disasters may be covered under specific peril policies or endorsements, but it is not what liability coverage addresses. Additionally, property damage to the insured’s own property is usually covered by the dwelling or property protection section of a policy, rather than the liability portion, which is designed to cover damages to others rather than the insured's own premises. Thus, the focus of liability coverage is on protecting the insured from claims made by third parties, ensuring they aren't financially burdened by legal repercussions.