Texas All Lines Adjuster Practice Test

What does public liability insurance primarily cover?

1. Property damage or personal injury to the general public

2. Losses incurred by public transportation services

3. Injuries suffered by employees at work

4. Personal injuries during legal proceedings

The correct answer is: Property damage or personal injury to the general public

Public liability insurance primarily covers property damage or personal injury caused by the policyholder to a third party, which can include members of the general public. This type of insurance is essential for businesses and individuals who may inadvertently harm someone or damage someone else's property while conducting their activities. It protects against legal claims brought by third parties, covering the costs of legal defense, settlement, or judgments that may arise from such incidents. While losses incurred by public transportation services, injuries suffered by employees at work, and personal injuries occurring during legal proceedings may involve liability issues, they do not fall under the typical coverage provided by public liability insurance. Instead, these scenarios are generally addressed by other types of insurance, such as workers’ compensation for employee injuries, specific liability coverage for service providers, or professional liability insurance related to legal proceedings.