Which of the following is a liability exposure to loss?

• A. Employee turnover risk (personnel exposure).
• B. Damages from a fire in a common area (property exposure).
• C. Liability losses such as damage to a person or to non-association property arising from legal claims.
• D. Loss of rental income due to vacancy.

Answer: (C)

Liability exposure means the risk of being legally responsible for injuries to people or damage to others’ property, leading to claims and potential money losses. The scenario described involves liability losses that arise from legal claims for harm to a person or damage to non-association property, which is exactly what liability exposure covers. The other options point to different kinds of risk: personnel exposure relates to employees and turnover, property exposure to damage to the association’s own property, and financial exposure like lost rental income from vacancies. Therefore, this scenario best fits liability exposure to loss.