West Virginia Property and Casualty Licensing Practice Exam

A company's promise "to pay for damage caused by or resulting from any covered loss" is stated in which section of a commercial property policy?

1. Conditions

2. Declarations

3. Insuring agreement

4. Exclusions

The correct answer is: Insuring agreement

The insuring agreement section of a commercial property policy outlines the insurer's commitment to provide coverage for specific risks or perils. In this context, it explicitly states the insurance company's promise "to pay for damage caused by or resulting from any covered loss." This portion is crucial as it defines the scope of coverage and what the insurer is obligated to pay in the event of a loss, setting the foundation for the contractual relationship between the insurer and the insured. The conditions section typically outlines the duties and responsibilities of both the insurer and the policyholder, providing guidelines for the claims process and other requirements needed to maintain coverage. The declarations section serves as a summary of important policy information, including the name of the insured, the coverage amounts, and the policy period, but it does not detail the insurer's scope of coverage. The exclusions section lists specific situations or types of damage that are not covered under the policy. While exclusions play a critical role in defining the boundaries of coverage, they do not promise payment for losses but rather clarify what is not included. Thus, the insuring agreement is the appropriate section that articulates the promise of coverage for losses, solidifying its significance in any commercial property policy.