Oregon Pre-License Property Management Practice Exam

General liability insurance is designed to protect businesses and individuals from claims involving bodily injury or property damage to third parties. This coverage is crucial for property managers and real estate professionals, as it helps mitigate the financial risks associated with accidents that may occur on properties under their management.

For instance, if a visitor to a managed property were to slip and fall, resulting in injury, general liability insurance would cover medical costs and legal expenses arising from potential lawsuits. Similarly, if damage is caused to someone else's property as a result of actions taken by the property manager or tenants, this insurance would also help cover those costs.

While other options mention relevant aspects of insurance, they fall outside the purview of general liability coverage. Property loss from theft typically would be covered by a property or crime insurance policy, while workers' compensation specifically addresses injuries sustained by employees on the job. Professional errors would be covered under a different type of insurance known as professional liability insurance. Thus, the correct answer points directly to the primary function of general liability insurance in protecting against third-party claims.