West Virginia Property and Casualty Licensing Practice Exam

A products liability policy primarily covers damages resulting from which incident?

1. Slips and falls in the store

2. A bicycle rider is injured due to a wheel malfunction

3. Property damage during transportation

4. Employee injuries in a workshop

The correct answer is: A bicycle rider is injured due to a wheel malfunction

A products liability policy is specifically designed to cover damages that arise from injuries or damages caused by the products that a business sells, manufactures, or distributes. This type of insurance protects businesses from claims related to the use of their products and includes instances where those products fail or are found to be defective. In the context of the given choices, the scenario involving the bicycle rider being injured due to a wheel malfunction is directly related to the product itself. If the wheel was defective or malfunctioned in a way that caused harm to the rider, this would fall under the provisions of a products liability policy. The policy would cover costs associated with legal claims, damages, and settlements resulting from such product-related incidents. In contrast, the other options pertain to different types of liability or insurance coverage. Slips and falls in a store would typically fall under general liability insurance, which focuses on premises liability rather than products. Property damage during transportation usually relates to auto or commercial property insurance, while employee injuries in a workshop are generally covered by workers' compensation insurance, which specifically addresses workplace injuries and does not relate to products liability. Thus, the focus of a products liability policy on damages stemming from a product malfunction reinforces why the bicycle wheel incident is the correct answer.