No, personal liability insurance is voluntary. Nevertheless, it is one of the most important types of cover. If you harm someone, even if it is unintentional, you are liable for it. This can soon become very expensive. The insurance covers justified claims of the injured party up to the sum insured. If any unjustified claims are made against you, these will be rejected by the insurance (referred to as passive legal protection).
Personal liability not only pays out in the event of a claim, but it also checks whether you are in fact liable.