What is the primary characteristic of liability coverage in an insurance policy?

Liability coverage in an insurance policy is primarily designed to protect the policyholder from claims made by others for bodily injury and property damage that they may cause. This means that if the insured is found to be legally responsible for causing harm to a person or damaging someone else's property, the liability coverage will help cover the associated costs, including legal defense fees, settlements, and judgments.

This type of coverage is critical in personal and commercial insurance policies, as it safeguards individuals and businesses against significant financial loss due to lawsuits arising from accidents or injuries for which they are liable.

In contrast, options that refer to protection against fraudulent claims or coverage for specific types of damages or errors do not fully encompass the broad purpose of liability coverage. These do not capture the essence of liability coverage, which fundamentally revolves around the financial implications of being held liable to third parties.