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:

Reorder Period

The time interval between placing orders for supplies or inventory to replenish stock.

Lead Time

The total time that elapses between the initiation and completion of a process, such as the period from placing an order to delivery of a product.

Re-Order Point

The reorder point is the level of inventory that triggers an action to replenish that particular inventory stock, ensuring a seamless operation without stockouts.