North Carolina Adjuster Practice Exam

What type of insurance should Nature's Best Vitamins purchase to protect their new lab during construction?

1. Builder's Risk Insurance

2. General Liability Insurance

3. Property Insurance

4. Professional Liability Insurance

The correct answer is: Builder's Risk Insurance

Builder's Risk Insurance is specifically designed for construction projects, making it the appropriate choice for Nature's Best Vitamins as they work on their new lab. This type of insurance provides coverage for buildings and structures that are under construction or renovation, protecting against risks such as theft, vandalism, fire, and weather damage that may occur during the building process. It is essential for businesses to have this coverage in place to ensure financial protection from potential losses that could delay the completion of the project or increase costs. Other types of insurance mentioned, such as General Liability Insurance, protects against third-party bodily injury and property damage claims, Property Insurance covers the physical assets of a business once they are fully operational, and Professional Liability Insurance addresses claims related to professional services and negligence. However, none of these would specifically cover the unique risks associated with a building under construction like Builder's Risk Insurance does.