Final answer:
The obligation of an insurance company to protect an employer against financial loss caused by acts of employees is known as liability insurance.
Step-by-step explanation:
The obligation of an insurance company to protect an employer against financial loss caused by acts of employees is known as liability insurance.
Liability insurance provides coverage for legal liability that arises when a person or organization becomes legally responsible for the injury or damage caused to another person or their property. In the context of an employer, liability insurance helps protect against claims and lawsuits brought by employees or third parties for acts committed by employees while performing their job duties.
For example, if an employee accidentally injures a customer while on the job, the liability insurance of the employer would cover the financial costs associated with the injury, such as medical expenses and legal fees.