What is the typical payout from a liability insurance policy when the insured is legally liable for damages?

Liability insurance is designed to provide coverage when the insured is legally liable for damages that result from their actions or negligence. In this context, the policy typically covers both personal injury claims and property damage claims.

Personal injuries can encompass medical expenses, lost wages, and pain and suffering from incidents where the insured is at fault, while property damages refer to the repair or replacement costs associated with damaged property. Since liability insurance aims to protect against a wide range of potential claims that arise from accidents or negligent acts, it effectively covers both aspects: personal liability and property damage.

This comprehensive coverage is essential for safeguarding the insured from significant financial losses due to unforeseen incidents, and it reflects the breadth of risks associated with general liability. Other options limit the scope of coverage, which does not align with the fundamental purpose of liability insurance. By encompassing both personal and property damages, the correct choice illustrates the true nature of liability coverage in insurance policies.