What is the purpose of a liability insurance policy?

A liability insurance policy is designed primarily to protect the insured from claims resulting from injuries and damage to other individuals or their property. This type of insurance covers legal costs and payouts for which the insured would be found legally liable, meaning that if a situation arises where the insured is held responsible for causing harm or damage, this policy will help cover the financial repercussions.

The focus of liability insurance is on providing a safety net against unforeseen incidents that may lead to legal claims. This could encompass a wide range of scenarios, such as accidents occurring on the insured's property or professional services leading to client injuries or damages. The comprehensive functionality of liability insurance makes it an essential component of risk management for both individuals and businesses, ensuring that they can mitigate potential financial loss related to unforeseen claims.

In contrast, other options pertain to different types of insurance needs. Covering damage to insured property relates to property insurance, providing income for disability is linked to disability insurance, and paying for business interruption losses is associated with business interruption insurance. Therefore, B is the correct choice, as it best identifies the core purpose of liability insurance.