What type of insurance covers the financial risks associated with personal property?

Property insurance is specifically designed to cover the financial risks associated with personal property. This type of insurance protects policyholders against losses or damages to their physical assets, such as homes, belongings, and other types of personal property due to events like theft, fire, or natural disasters. For individuals, this can include standard homeowners' insurance or renters' insurance, which provide coverage for various types of personal property.

Understanding the scope of property insurance demonstrates its importance in mitigating financial loss from damage to owned items. The other types of insurance mentioned serve different purposes. For instance, commercial insurance focuses on protecting businesses, liability insurance deals with legal liability for injuries or damages to others, and workers' compensation insurance provides medical benefits and wage replacement for employees injured on the job. Each of these has a distinct function that doesn’t encompass the coverage provided by property insurance.