Edmentum Personal Finance Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

Professional liability insurance is specifically designed to protect individuals and businesses from claims that arise due to the performance of professional services. This type of insurance covers alleged negligence, errors, or omissions made while providing those services. It is particularly relevant for professionals such as doctors, lawyers, accountants, and consultants, who could face lawsuits from clients or patients claiming that their services caused financial loss or harm.

In contrast, health insurance focuses on covering medical expenses related to personal health needs, homeowners insurance protects property and possessions within a home, and automobile insurance pertains to vehicle-related incidents. Each of these types addresses different risks and liabilities unrelated to the services provided by professionals, which is why professional liability insurance is the appropriate choice for covering losses linked to professional work.