Which term describes the legal responsibility an insurer has towards claims covered by a policy?

The term that describes the legal responsibility an insurer has towards claims covered by a policy is liability. In the context of insurance, liability refers to the insurer's obligation to pay for losses or damages resulting from covered events as specified in the insurance policy. This encompasses both the monetary implications, such as paying claims, and the legal responsibilities that arise when an insurer must fulfill the terms of the contract they agreed upon with the policyholder.

While indemnity also relates to insurance, it specifically refers to the principle that aims to restore the insured to their financial position prior to the loss, rather than focusing on the legal obligations of the insurer. Coverage pertains to what is included under the policy and the specific events that are protected, but it does not capture the legal responsibility aspect. Exclusion lists events or conditions that are not covered by the policy, which does not speak to the insurer's obligations. Ultimately, liability is the term that directly encompasses the legal responsibilities that insurers hold regarding claims.