What is the main purpose of liability insurance?

Liability insurance primarily serves to protect individuals or businesses from claims involving injuries or damages they may cause to other parties. This type of insurance is essential because it provides financial coverage for legal defense costs and potential settlements or judgments that may arise from lawsuits related to the insured's actions or negligence.

For instance, if a person is involved in a car accident that results in injuries to another driver, liability insurance would cover the injured party's medical expenses and other related costs, thereby offering peace of mind to the insured that they are shielded from significant financial loss due to legal claims.

Understanding this key aspect of liability insurance highlights its fundamental purpose: to ensure that individuals and businesses are financially equipped to handle the consequences of their actions that may result in harm to others. This aspect makes option B the correct answer, as it encapsulates the essence of what liability insurance is designed to achieve.