Which of the Following Is True About Professional Indemnity Insurance

question 58

Multiple Choice

Which of the following is true about professional indemnity insurance?

• A) It provides liability coverage in the event that a professional is sued for failing to live up to his or her professional responsibilities.
• B) It does not cover malpractice claims, only negligence claims.
• C) Doctors and lawyers are eligible to purchase this insurance, but not other professionals.
• D) Professionals purchase malpractice insurance, not professional indemnity insurance.
• E) Only accountants who are certified public accountants may purchase professional indemnity insurance.

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Definitions:

Value Added

The increase in worth of a product or service as a result of a particular process, typically measured as the difference between the market price and the production cost.

Final Sales

The total value of all goods and services sold for final use, excluding intermediary transactions and unsold inventory.

Leakage

In economics, the term refers to a situation where income or resources exit an economy or system rather than being retained or reinvested.

Circular Flow

Describes the continuous movement of goods, services, and money between households and businesses in an economy, illustrating how these entities interact in the markets for resources and products.