Georgia Property & Casualty Practice Exam

What type of policy would most likely be used to protect a business's valuable equipment?

1. Business interruption insurance

2. Commercial property insurance

3. General liability insurance

4. Workers' compensation insurance

The correct answer is: Commercial property insurance

The most suitable policy for protecting a business's valuable equipment is commercial property insurance. This type of coverage specifically addresses losses related to physical assets, such as equipment, machinery, inventory, and other property owned by the business. It provides financial protection against risks such as theft, fire, vandalism, and other types of damage, ensuring that the business can recover the value of its essential tools and equipment needed for operations. Business interruption insurance, while important, primarily focuses on the loss of income a business might suffer due to a shutdown or disruption resulting from a covered event. It does not cover the physical loss or damage to equipment itself. General liability insurance protects against claims of bodily injury or property damage that the business might cause to third parties, rather than covering the business's own assets. Workers' compensation insurance provides benefits to employees who sustain work-related injuries or illnesses, and does not provide coverage for the business's equipment or property. Hence, commercial property insurance is clearly the right choice for safeguarding a business's valuable equipment.