Liability insurance is third-party insurance, which means it protects a policyholder from claims by third parties. Liability insurance provides this protection in two ways. First, the insurer defends the policyholder against third-party claims. Second, the insurer indemnifies the policyholder by paying the cost of claim judgments or settlements. In this lesson, we’ll look at the first protection: the insurer’s duty to defend the policyholder. Indemnity coverage is discussed in a separate...