Liability insurance is a protection for the policyholder who is at fault in an accident. In particular, liability insurance is available to auto, homeowners, commercial, and watercraft insurance. This form of insurance has coverages that protect the policyholders from a lawsuit. There are two components of liability car insurance: bodily injury and property damage liability. Furthermore, without carrying at least a minimum amount of liability coverage, you will pay for the damages you might cause to others with a serious amount of money out of pocket.