Liability insurance has a big impact on how tort law works. It affects who can be sued, how much money can be paid out, and even changes how lawsuits are handled. For most people and companies, having liability insurance is like having automatic protection against being sued. The limits on insurance coverage also limit how much money can be paid out in a lawsuit. Lawsuits are often shaped by what insurance will cover, not just by who is at fault. Insurance companies also simplify complex legal rules, making it less about individual fault. Negotiations over insurance coverage can drive how lawsuits play out, even though insurance isn't part of the official laws on the books.