What type of insurance addresses loss of crops due to natural disasters?

Study for the CII London Market 1 (LM1) Test. Enhance your knowledge of the insurance industry with multiple choice questions. Discover hints and explanations to get exam ready!

Agricultural insurance is the correct answer because it encompasses a range of insurance products specifically designed to protect farmers against losses associated with their agricultural activities. This type of insurance often covers events such as natural disasters, including floods, droughts, and storms, which can lead to significant damage and loss of crops.

While crop yield insurance is a subset of agricultural insurance that focuses specifically on the volume of crops produced, agricultural insurance itself covers a broader spectrum, including liability and other risks that farmers may face. Property damage insurance typically pertains to physical damage to property rather than the specifics of crops and agricultural productivity. Business interruption insurance provides coverage for lost income due to disruptions in operations but is not specific to agriculture. Therefore, selecting agricultural insurance is appropriate as it provides comprehensive protection tailored to the unique risks faced by farmers.

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