New York Insurance Exam Practice Question
Which type of insurance covers damage to another person's property?
Correct Answer: A
Rationale: Liability insurance is specifically designed to cover damages or injuries inflicted on another person's property, making it essential for individuals and businesses to protect themselves against potential claims.
Property insurance, on the other hand, covers damage to one’s own property rather than that of others. Workers' compensation insurance provides benefits to employees injured on the job, focusing on medical costs and lost wages rather than property damage. Business interruption insurance compensates for lost income due to disruptions in operations, not for property damage claims. Thus, liability insurance is the most appropriate choice for covering damage to another person's property.
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