Which type of insurance specifically protects against third-party claims?

The type of insurance that specifically protects against third-party claims is general liability insurance. This coverage is designed to protect businesses and individuals from legal claims made by third parties for bodily injury or property damage that occurs as a result of their actions or negligence.

General liability insurance will pay for the legal defense costs and any settlements or judgments that may arise from such claims, ensuring that the insured party is protected financially. This type of insurance is essential for businesses since it mitigates risk associated with operational activities, safeguarding assets from potential lawsuits.

Health insurance primarily covers medical expenses for individuals and does not address third-party claims. Homeowners insurance mainly protects homeowners from risks related to their property and personal liability but isn't specific to third-party claims in the same comprehensive manner as general liability. Auto insurance covers claims related to vehicle accidents, including liability for damage caused to others, but it is not solely focused on the broader spectrum of third-party claims like general liability is.