Which of the following best describes the Suspension Provision?

a. None are correct.

b. Coverage is suspended if protective safeguards that are required are not in active working order.

c. The insurer has no right to suspend coverage for any reason.

d. The insurer has the right to suspend coverage or cancel the policy if equipment is found to be in bad or dangerous condition.

Answer: D

Commercial Property Policy

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An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?

An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay? a) $0 b) $30,000 c) $32,000 d) $40,000 Answer: B

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