Which type of insurance is focused primarily on covering damages resulting from a breach of contract?

The correct answer, professional liability insurance, specifically addresses claims arising from professional services rendered by individuals or businesses. It provides coverage for damages that occur due to a breach of duty, errors, or omissions in the performance of those professional services. This type of insurance is essential in fields where professionals may be held accountable for failing to deliver services as per the contracts agreed upon with their clients.

Professional liability insurance is designed to protect against financial loss due to claims initiated against the insured for negligence or inadequate work. For example, in consulting, legal, or healthcare professions, a breach of contract could lead to claims of negligence, where the client may seek compensation for damages resulting from such breaches.

Liability insurance, while it covers claims made against an individual or business for negligence leading to third-party injuries or damages, does not specifically focus on contract-related issues. Performance bond insurance applies to guarantees ensuring that contractual obligations are fulfilled, primarily in construction and service contracts, but it does not indemnify for damages resulting from a breach itself. Commercial property insurance insures physical assets against risks like theft or damage but is unrelated to contractual liabilities.

Thus, professional liability insurance is the most appropriate type of coverage for addressing damages resulting from breaches of contract in professional services.