California Property & Casualty Broker-AgentGeneral InsuranceMedium
A client is looking to purchase a policy that protects against financial losses arising from legal liability for property damage or bodily injury to others. Which type of insurance would best suit their needs?
- ALife Insurance
- BHealth Insurance
- CProperty Insurance
- DLiability Insurance
Show answer & explanationAnswer & explanation
Correct answer: D. Liability Insurance
Liability insurance specifically covers financial losses an insured is legally obligated to pay due to causing bodily injury or property damage to third parties. This directly matches the client's need.
Why the other options are wrong
- A. Life insurance covers financial losses due to the death of the insured.
- B. Health insurance covers medical expenses due to illness or injury to the insured.
- C. Property insurance covers damage to the insured's own property, not liability to others.
Liability Insurance
Insurance that protects the insured against financial loss arising from their legal responsibility for injury to others or damage to their property.
- Covers third-party claims.
- Pays for bodily injury and property damage.
- Can include legal defense costs.
Memory trick: Life, Health, Property, and Liability: Each one has a specialty!