West Virginia Adjusters Practice Exam 2025 - Free Adjuster License Practice Questions and Study Guide

Liability insurance is designed to protect individuals and businesses from claims made by third parties for injuries or damages they have caused. This can include situations where a person is injured on someone's property or where a product sold by a business causes harm. By covering claims for injuries or damage to others, liability insurance plays a crucial role in safeguarding against financial losses that could arise from lawsuits or legal claims.

In contrast to liability insurance, property insurance specifically covers damage to the policyholder's own property, such as buildings, equipment, or inventory, from risks like fire, theft, or vandalism. While liability insurance is focused on protecting against claims from others, property insurance is about protecting one's own assets.

The other options provide misleading information regarding the definitions of liability and property insurance. For instance, liability insurance does not cover damage to one's own property, and property insurance is not universally required for all businesses. Additionally, property insurance extends beyond natural disasters to cover various risks affecting owned property.