CPB Certified Professional Biller Certification Practice Exam

What is business liability insurance designed to protect?

1. Employee health and wellness programs

2. Business assets and costs related to lawsuits

3. Personal liability of the business owner

4. Insurance against data breaches

The correct answer is: Business assets and costs related to lawsuits

Business liability insurance is specifically intended to safeguard a business against legal claims and expenses that arise from lawsuits, which can include costs associated with legal defenses, settlements, or judgments. This type of insurance is critical for businesses as it helps cover financial losses related to incidents such as bodily injury, property damage, or other claims made by third parties. While options like employee health and wellness programs or personal liability pertain to different types of coverage and protection, they do not align with the primary purpose of business liability insurance. Additionally, insurance against data breaches falls under cyber liability insurance, which addresses specific risks associated with data privacy and cybersecurity threats. Therefore, the focus of business liability insurance is firmly on protecting the business's financial interests and liabilities arising from legal claims.