Florida Insurance Licensing Practice Exam

Liability insurance covers the costs of any damages or losses caused by the insured's negligence to a third party. This is different from property insurance, which only covers damage to the insured's property, and life and health insurance, which cover personal medical expenses and benefits for the insured. Option A, liability insurance, is the only option that specifically mentions coverage for loss arising out of negligence and payment to a third party, making it the best choice for this type of situation.