Which type of insurance covers losses to third parties caused by the insured?

Liability insurance provides coverage for losses or damages to third parties that are caused by the insured. This type of insurance is essential for individuals and businesses as it protects them from the financial burden of legal claims and lawsuits arising from accidents, injuries, or negligence that result in harm to others. For example, if an individual accidentally causes a physical injury to someone else or damages a third party's property, liability insurance would cover the costs associated with the damages or legal fees.

Disability insurance, on the other hand, provides income replacement if the insured becomes unable to work due to a medical condition, and does not cover liability-related incidents. Workers' compensation focuses on providing benefits to employees who are injured at work, ensuring that they receive medical care and compensation for lost wages, but it is specific to employment-related injuries. Health insurance covers medical expenses for the insured's own healthcare needs and does not address liabilities to others.