Certified Meeting Professional (CMP) Practice Exam

What type of liability insurance provides protection against negligence leading to fire?

1. Umbrella liability insurance

2. Workers' compensation insurance

3. Fire liability insurance

4. Commercial general liability insurance

The correct answer is: Fire liability insurance

The correct type of liability insurance that specifically protects against negligence leading to fire is fire liability insurance. This coverage is designed to address situations where a party may be held legally responsible for damages resulting from a fire that was caused by their negligence or failure to take adequate precautions. It provides financial protection by covering legal costs and damages associated with claims made against the insured party. While other insurance types can provide general liability coverage, fire liability insurance is specifically targeted towards incidents involving fire-related claims. For example, an event venue could benefit from this type of insurance to safeguard against potential legal implications arising from a fire that may occur due to their oversight. Other options such as umbrella liability insurance add extra coverage beyond existing policies but do not exclusively cover fire-related negligence. Workers' compensation insurance covers workplace injuries for employees, and commercial general liability insurance offers broader protection but is not specifically focused on fire negligence.