Liability in the context of insurance refers to the legal responsibility one party has for the financial costs incurred due to causing damage or injury to another party or their property. This concept is central to many types of insurance policies, such as auto, homeowners, and general business liability insurance. When an insured party is deemed liable for an incident, their insurance policy may cover the costs associated with that liability, up to the limits specified in the policy. This can include medical expenses, legal fees, and reparations for property damage. Liability coverage is designed to protect the insured from the potentially devastating financial consequences of being held accountable for accidents or negligent actions that cause harm to others.
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