What kind of losses does liability insurance typically cover?

Liability insurance is designed to protect the insured from claims made against them for injuries or damages they may have caused to other individuals or their property. This coverage is particularly important because it addresses financial responsibility in situations where the insured is found legally liable for harm.

The correct answer indicates that liability insurance typically covers injuries or damages for which the insured is legally responsible. This means if an individual is sued for causing bodily injury to another person or for damaging someone else's property, their liability insurance would cover the associated legal costs as well as any settlements or judgments awarded to the injured party.

The other options focus on areas that are not covered by liability insurance. For instance, property damage of the owner would be covered by a different type of insurance, such as homeowners or auto insurance, not liability insurance. Similarly, liability insurance does not cover personal property losses of the insured or future income losses, as these scenarios pertain to direct damage to the insured's own assets or loss of earnings rather than obligations to third parties.