Idaho Property and Casualty Practice Exam 2025 - Free Practice Questions and Study Guide

Liability insurance for professionals primarily serves to protect against claims arising from negligence or malpractice. This type of insurance is essential for individuals such as doctors, lawyers, and other professionals whose work carries the risk of lawsuits due to their professional actions or advice. When a client or patient believes that a professional has failed in their duty, resulting in harm or financial loss, liability insurance provides coverage for legal fees, settlements, or judgments that may arise from those claims.

This protection is vital as it ensures that professionals can continue their work without the constant fear of financial ruin due to potential lawsuits. It also promotes accountability, encouraging professionals to adhere to standards of care and operate with diligence, knowing they have a safety net in place should disputes arise.

The other options, while important in their respective contexts, do not align with the primary purpose of liability insurance. Operational expenses, employee health insurance, and tax discounts do not address the fundamental risk professionals face in relation to their conduct and the potential for legal claims made against them.