Florida Insurance Licensing Practice Exam

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What is the difference between liability and coverage?

There is no difference
They are not related
Liability is a legal doctrine and coverage is a contractual obligation
Coverage is a legal obligation and liability is a legal obligation

The correct answer is: Liability is a legal doctrine and coverage is a contractual obligation

Liability refers to one's legal responsibility for something, while coverage refers to the protection or financial support one has in case of an event. These two terms are often associated with insurance, where liability insurance covers the costs of damages or injuries caused by the insured person, while coverage refers to the extent or amount of protection and benefits provided by an insurance policy. Therefore, option A and B are incorrect as there is a clear difference between liability and coverage. Option D is also incorrect as both liability and coverage can be legal obligations depending on the situation.