Final answer:
True, the insured has a duty to mitigate further damage to their property after a loss, as part of their insurance policy responsibilities. This includes installing security measures and ensuring fire systems work properly to prevent additional harm.
Step-by-step explanation:
True. One of the duties of an insured after sustaining a loss to property is to mitigate further damage to the property. This responsibility falls under the principle of mitigation of loss in insurance policies. By taking reasonable steps to prevent additional harm, the insured helps to keep costs and losses to a minimum for both themselves and the insurance company.
For example, suppose a business's property has been damaged due to a fire. In that case, the business owner is expected to act by installing a minimum level of security and ensuring any fire sprinkler systems are functioning properly to prevent further damage. This effort reflects the rationale behind purchasing insurance to mitigate risks with low probability but high consequences. In a broader aspect, insurance companies might offer lower rates if regular inspections of security and fire systems are conducted because these actions reduce moral hazard and insurance fraud.