Liability insurance is a type of coverage that protects individuals and businesses from financial loss if they are found legally responsible for causing harm to someone else or their property. For example, if a person accidentally damages a neighbor's fence, liability insurance can help cover the costs of repairs, ensuring that the individual does not have to pay out of pocket. This insurance is essential for various professions, including doctors, contractors, and business owners, as it safeguards against lawsuits and claims. By having liability insurance, policyholders can have peace of mind knowing they are protected from unexpected legal expenses and potential financial ruin.