California IDEX Practice Exam

What type of insurance is an owner NOT required to carry?

1. Errors and omissions

2. General liability

3. Property

4. Worker's comp

The correct answer is: Errors and omissions

The correct answer indicates that an owner is not required to carry errors and omissions insurance. This type of insurance is primarily designed to protect professionals from claims of negligence, errors, or omissions in the services they provide. While highly recommended for certain professions, such as real estate agents and insurance brokers, it is not mandated by law for all business owners. In contrast, general liability insurance is typically required for business operations to protect against claims of bodily injury, property damage, and personal injury. Property insurance protects business assets against loss or damage, and worker's compensation is legally required in most states to cover employees who may be injured on the job. Since these other forms of insurance are often necessary to comply with various legal and financial obligations, errors and omissions insurance stands out as not being universally required.