What type of insurance allows the contractor to assume another party’s liability through a hold harmless clause?

Indemnification is the correct choice because it specifically refers to a legal mechanism where one party agrees to assume the liability or risk of loss of another party. In the context of contracts and licensing, a hold harmless clause is typically included in agreements to ensure that one party will not hold the other responsible for certain damages or liabilities that may arise during the execution of the contract. This type of insurance effectively transfers the risk and responsibility for losses from one party to another, reinforcing the concept of indemnification.

In contrast, general liability insurance primarily protects contractors against claims arising from bodily injury or property damage due to their operations, but it does not specifically include the agreement to hold another party harmless. Professional liability insurance covers claims related to professional services or advice but is not focused on liability assumption through hold harmless clauses. Contractor's property insurance pertains to coverage for physical assets owned by the contractor, which does not involve liability assumptions. Therefore, indemnification is the most accurate answer regarding the assumption of another party's liability through a hold harmless clause.