What is the definition of liability in terms of insurance?

Liability in terms of insurance refers to the legal responsibility that one party has for the damages or injuries caused to another party due to negligence or wrongful acts. The definition encompasses losses resulting from negligent actions that harm others' property or cause bodily injury. This concept is foundational in both personal and commercial insurance policies, as it establishes the circumstances under which an insurer will cover costs associated with claims made against the policyholder. It emphasizes the obligation to compensate others for damages incurred due to one's actions or inactions, highlighting the need for protection against such financial exposures.

In this context, the other options do not accurately capture the essence of liability. Financial rewards after claims pertain to the benefits received from insurance rather than the liabilities themselves. Losses from intentional damage imply a malicious act, which is outside the typical bounds of liability coverage as it usually deals with unintentional harm. Lastly, coverage for business-related injuries is too narrow and does not encompass the broader spectrum of liability that includes personal and property damage regardless of the setting. Therefore, the correct definition is focused specifically on negligent actions leading to harm to others, which is captured in the chosen answer.