Question

The ABC Laundry Service has a commercial property policy with your company. An employee dropped a cigarette into a waste basket without putting it completely out and a fire destroyed half the store before it was extinguished. The local fire department sends the laundry a bill for $626.00 for their response to put out the fire. Will the policy cover this expense and how much?

(A) Yes. Fire Department Service Charge is included up to $1,000, thus covering the entire bill.

(B) No. This is excluded under Preservation of Property coverage.

(C) No. This is considered part of an Insured's self-insured responsibility.

(D) Yes. It is considered part of Debris Removal and the first $250 is covered.

Answer 1

ABC Laundry Service's commercial property policy covers the fire department service charge, paying the full amount of the $626 bill as it is included under the policy up to $1,000.

Step-by-step explanation:

Will ABC Laundry's Commercial Property Policy Cover the Fire Department Service Charge?

Regarding the question of whether the ABC Laundry Service's commercial property policy will cover the expense of the fire department service charge, the correct answer is: (A) Yes. Fire Department Service Charge is included up to $1,000, thus covering the entire $626.00 bill. This type of coverage is typically included in commercial property policies to handle charges like those incurred for the fire department's services when they respond to a fire at an insured property.

When analyzing insurance policy coverages, it is important to understand the specifics of what each policy includes. In this scenario, the commercial property policy of the laundry service does cover the fire department charge up to the specified limit. Therefore, the property owner can file a claim for this particular cost under their policy.