Which statement regarding liability coverage is NOT true?

The statement that is not true is that the policyholder can sue the insurer regardless of policy conditions. In insurance law, the ability to sue an insurer is generally contingent upon the policyholder complying with the terms and conditions outlined in the insurance policy. If a policyholder violates the conditions or fails to fulfill certain obligations, such as timely notifying the insurer of a claim or paying premiums, the insurer may have grounds to deny coverage or defend against a lawsuit. Thus, this statement is misleading regarding the legal relationship between the policyholder and the insurer.

On the other hand, the other statements reflect accurate information regarding liability coverage. Coverage for accidents occurring outside the policy limits typically does not exist; liability policies are designed with specific coverage limits, and any claims exceeding those limits may not be covered. Coverage indeed applies to incidental business activities of the insured, as many policies extend liability coverage to certain activities, even if they are not the primary purpose of the insured’s residence. Finally, personal liability is indeed included in standard homeowners insurance policies, providing coverage for claims made against the policyholder for bodily injuries or property damage caused to others as a result of their personal activities.