What does tenant liability insurance protect against?

Tenant liability insurance is designed to protect landlords from financial losses incurred due to damage that their tenants may cause to the property or injuries that occur within the rental unit. This type of insurance typically covers costs associated with repairing damages that tenants have inflicted, whether intentionally or accidentally, on the rental property. Additionally, it may also offer coverage for legal fees if a tenant's actions lead to a lawsuit against the landlord.

In this context, the correct answer highlights that the insurance specifically addresses financial losses resulting from the actions of tenants, which can include damage to the unit or common areas as a result of the tenant's negligence or misconduct. This coverage is an essential aspect of managing rental properties, as it helps to mitigate the financial risks landlords face from their tenants' potential actions.