Washington State Insurance Practice Exam

What type of coverage does general liability insurance provide?

1. Protection against professional malpractice

2. Coverage for natural disasters

3. Protection from general claims of bodily injury and property damage

4. Insurance against cyber attacks

The correct answer is: Protection from general claims of bodily injury and property damage

General liability insurance is designed to provide coverage for a wide range of common risks that businesses face. It primarily protects against claims that relate to bodily injury and property damage suffered by third parties. This coverage is crucial because it safeguards businesses against lawsuits or claims arising from accidents that occur on their premises or as a result of their operations. For instance, if a customer slips and falls in a store and sustains an injury, general liability insurance would help cover the medical expenses and any legal fees if a lawsuit ensues. Similarly, if a business inadvertently damages a client's property while conducting work, this insurance would provide the necessary financial protection to address the claims. The other options focus on specific areas not encompassed by general liability insurance. Professional malpractice, for example, would be covered under professional liability insurance, which specifically protects professionals against claims arising from their services. Natural disasters generally require separate coverage through property insurance. Cyber attacks are addressed with cyber liability insurance, tailored to protect against data breaches and cyber-related incidents. Therefore, the key purpose of general liability insurance is to cover general claims of bodily injury and property damage, making the selected answer the most accurate.