State Farm Insurance License Practice Exam

What does a commercial package policy typically include?

1. Only liability coverage

2. Basic property and liability insurance

3. Only workers’ compensation insurance

4. Standard health coverage

The correct answer is: Basic property and liability insurance

A commercial package policy is designed to offer businesses a flexible solution that combines multiple insurance coverages into a single policy. This typically includes both basic property insurance and liability insurance, providing a comprehensive safety net for a business’s assets and its legal responsibilities. Basic property insurance within this policy covers losses or damage to the physical assets of the business, such as buildings, equipment, and inventory, protecting against risks like fire, theft, and certain types of damage. Meanwhile, the liability insurance component safeguards the business against claims of bodily injury or property damage that may occur due to the business operations, providing coverage for legal defense costs and settlements. The other options presented do not reflect the comprehensive nature of a commercial package policy. Liability coverage alone does not address the property aspect, while workers' compensation insurance and health coverage are typically offered as separate policies or components rather than part of a standard commercial package. This integration of property and liability coverages is what makes option B the most accurate representation of a commercial package policy's offerings.