General Lines Property and Casualty Insurance 2025 – 400 Free Practice Questions to Pass the Exam

General liability coverage is primarily designed to protect businesses against claims of bodily injury and property damage that occur as a result of their operations. This type of coverage addresses the legal liabilities businesses may face when a third party suffers harm or damage that can be attributed to the business's activities, premises, or products.

The scope of general liability coverage includes legal defense costs associated with defending against such claims, as well as any settlements or awards granted to the injured parties, up to the policy limits. This means that if someone sustains an injury while visiting a business location or if a product sold by the business causes damage to someone's property, general liability insurance would step in to cover the legal claims arising from these incidents.

While the other options mention aspects of insurance coverage, they do not accurately represent the full breadth of general liability coverage. For example, coverage for damages to personal property, lost wages, or specific manufacturing risks does not encompass the broader protection that general liability offers against various claims of bodily injury and property damage. Thus, the correct choice effectively captures the essence and purpose of general liability insurance.