Alabama Insurance Adjuster Practice Exam

If Aaron's soybeans cause illness, what type of coverage will pay for the claims filed against him?

1. Product Liability Insurance

2. General Liability Insurance

3. Crop Insurance

4. Commercial Liability Insurance

The correct answer is: Product Liability Insurance

Product Liability Insurance is specifically designed to cover claims arising from the use of products that cause harm or injury to individuals. Since the question indicates that Aaron's soybeans caused illness, this situation falls squarely within the realm of product liability, as it directly pertains to the risks associated with a product that is sold or distributed. This type of insurance provides financial protection against the legal costs and damages that can arise from claims related to the injury caused by a product, thus making it highly relevant for cases like Aaron's. It covers things like medical expenses for those affected, legal fees, and potential settlements or judgment amounts awarded to the claimants. The other types of coverage, while related to business or liability issues, do not specifically address the scenario of injury caused by a product. General Liability Insurance, for example, offers more overall liability coverage, but it may not necessarily include specific protection against claims for injury or damage caused by products sold. Crop Insurance is focused on damages to crops rather than liability from products, and Commercial Liability Insurance is a broader term that doesn’t specifically cover product-related claims. Therefore, Product Liability Insurance is the most suitable coverage for this scenario.