What is an example of a liability risk?

An example of a liability risk is injury caused to another person. Liability risks arise when an individual or an entity has a legal obligation to compensate others for damages or injuries that occur due to their actions or negligence. In this case, if someone accidentally injures another person, they may be held responsible for the medical expenses, lost wages, and other damages that result from that injury. This highlights the importance of liability insurance, which provides coverage for such situations to protect against the financial consequences of legal claims.

The other choices refer to different types of risks. Unemployment relates to the loss of income due to job loss, which is considered a personal or economic risk. Property damage due to fire is an example of a property risk, where the focus is on the damage to assets rather than liability to others. Loss of personal property also falls under the category of property risk, as it pertains to the risk of losing one's own belongings rather than the risk of causing harm to someone else.