Beverly Has an HO-3 Contract with a $100,000 Per Occurrence

question 43

Multiple Choice

Beverly has an HO-3 contract with a $100,000 per occurrence limit on the Liability coverage. She rents out her basement to a college student, and the student's personal property is damaged by Beverly's negligence. The student sues her for $3,000. How much will the HO policy pay for this loss?

• A) $0 is paid because this liability is excluded.
• B) $0 is paid due to the care, custody and control exclusion.
• C) $3,000 is paid because the loss is not excluded.
• D) $3,000 is paid under the property section and not the legal liability section.

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Definitions:

Seller

A person or entity that offers a product or service for sale.

Conglomerate Merger

A merger between companies operating in unrelated business activities, often aimed at diversification and risk management.

Noncompeting Firms

Businesses operating in different markets or sectors and thus do not compete directly with each other for customers.

Unrelated Goods

Products that are not associated or commonly linked together in the context of production, use, or consumption.