Alabama Property and Casualty Practice Exam

What type of liability insurance covers damages or injuries caused by an insured's personal actions?

1. General liability

2. Professional liability

3. Employers' liability

4. Product liability

The correct answer is: General liability

General liability insurance is designed to cover damages or injuries that may occur as a result of an insured's personal actions. This type of insurance typically addresses a wide range of potential liabilities, including bodily injury, property damage, and personal injury claims. For example, if an individual accidentally causes harm to someone else or their property during a social gathering, general liability insurance would help cover the associated costs. In contrast, professional liability insurance is tailored to protect professionals against claims of negligence or misconduct in the performance of their professional duties. Employers' liability insurance specifically addresses risks associated with employee injuries occurring in the course of employment, and product liability insurance deals with damages caused by a defective product manufactured or sold by a business. Thus, general liability is the most applicable option for covering personal actions that result in damages or injuries.