Which of the following is NOT covered by typical liability insurance?

• A. Property damage to third parties
• B. Bodily injury to customers
• C. Damage to the insured's own property
• D. Injuries caused by product defects

Answer: (C)

Liability insurance is designed to protect the insured from claims made by others for damage or injury, which is why it typically covers property damage to third parties, bodily injury to customers, and injuries caused by product defects. However, it does not cover damage to the insured's own property. This is because liability insurance is fundamentally concerned with the insured’s legal responsibilities and obligations to others rather than their own assets.

When it comes to property damage and bodily injury to others, these situations fall squarely within the scope of liability coverage, as they relate to the insured’s potential legal liabilities. Product defects that result in injuries also fall under liability, as they involve the insured's responsibility for harm caused by their product.

Therefore, option C is the correct answer as it highlights the key limitation of liability insurance, which is its inability to cover any damage or loss to the insured's own property. This distinction is critical for anyone looking to understand the purpose and function of liability insurance in a practical context.