Real Estate Council of Alberta Fundamentals Practice Exam

What does civil liability refer to in an insurance context?

1. Criminal negligence

2. Contractual breaches

3. Injury or damage claims

4. Fraudulent activities

The correct answer is: Injury or damage claims

Civil liability in an insurance context primarily pertains to claims for injury or damage caused to another party. This encompasses various situations where an individual or entity may be legally responsible for harm resulting from their actions or omissions, which can lead to financial compensation claims against them. In the realm of insurance, civil liability is typically covered under various types of liability policies, such as personal liability or professional liability insurance. These policies are designed to protect the insured from the legal repercussions of being held liable for damages that occur due to their negligence or unintentional harmful acts, thereby providing financial support for legal defense and settlements awarded to the injured party. Other options involve different legal concepts. Criminal negligence refers to actions that are so careless they amount to a crime, while contractual breaches involve failure to meet the obligations outlined in a contract. Fraudulent activities imply deceit or fraud, which typically do not fall under civil liability as it is designated for civil law rather than criminal law.