Liability insurance covers the eventuality that a third party gets injured whilst at your property, or by your property. Lets assume somebody is walking past your house, and a roofing tile falls down and strikes them on the head, causing them injury and potentially a large hospital bill. If you are not covered and the third party takes legal action against you, then you may find yourself having to cover potentially huge bills. Personal Liability Insurance takes care of such issues leaving you free to get on with your daily life.
If you employ a driver, or any domestic workers, then you could be held liable, under Thai Labour Law, should they get injured or sick as a result of their employment.