Which type of insurance protects businesses from breaches of contract?

The correct choice is professional liability insurance because it specifically covers businesses against claims that arise from breaches of contract or professional negligence. This type of insurance is vital for professionals who provide services or advice, as it protects them from the financial consequences stemming from failures to meet contractual obligations or failing to deliver services at the expected standard.

Professional liability insurance, often referred to as errors and omissions insurance, directly helps professionals maintain their business operations when sued for negligence or breach of contract. It covers not only legal defense costs but also any settlements or judgments against the business, providing a crucial safety net in industries where contracts and expectations are a fundamental part of service delivery.

The other types of insurance mentioned serve different purposes. Property insurance is designed to cover physical assets against risks like fire, theft, or damage; general liability insurance protects against third-party bodily injury or property damage claims; and business interruption insurance provides compensation for lost income due to disruptions, but none of these specifically address the financial risks associated with breaches of contract.