IREM Certified Property Manager (CPM) Practice Test 2025 - Free CPM Practice Questions and Study Guide

Commercial liability insurance primarily covers claims related to negligence that result in injury or damage to third parties. This includes bodily injury claims where an individual is injured on the premises due to the property owner's negligence or legal defense costs associated with claims made against the business.

For example, if a customer slips and falls in a business's location due to unsafe conditions, the commercial liability insurance would help cover medical expenses, legal fees, and any settlements or judgments that may arise from the claim. This coverage is essential for protecting businesses from unforeseen incidents that could lead to significant financial loss.

In contrast, other options do not fully encompass the primary focus of commercial liability insurance. Property damage claims may be specifically covered under property insurance rather than liability insurance. Loss of rental income relates more to business interruption or income protection insurance, and employee injury claims fall under workers' compensation insurance, which is a different type of coverage unrelated to commercial liability. Thus, the correct answer provides a comprehensive overview of the protection commercial liability insurance offers in the context of negligence claims.