Liability insurance offers protection against third party claims. Distinctive feature of this type of insurance is that the claim payment is not generally made to the insured but to someone suffering a loss who is not a party to the insurance contract.
What is covered and what is not covered under the liability policy
Unintentional loss/damage caused by any action of the insured to a third party resulting in a personal injury or a property loss is covered under the policy. Intentional damages and contractual liabilities are not covered under the policy. When a claim is made, the insurance company has the right to defend the insured and the legal costs are over and above the liability limits set under the policy.