Question

Craig purchased some additional machinery for his business so that he can keep up with customer demand. The problem is that Craig does not have enough space for the newly purchased machinery. He rents a storage unit to house the machinery until he can bring it to the company, but when the storage unit burns down, Craig's equipment goes with it. Which coverage extension might indemnify Craig for his loss?

A. Property Off-Premise
B. Preservation of Property
C. Outdoor Property
D. Newly Acquired Property

Answer 1

The coverage extension that might indemnify Craig for his loss is Newly Acquired Property.

Step-by-step explanation:

The coverage extension that might indemnify Craig for his loss is Newly Acquired Property.

Newly Acquired Property coverage applies to property that the insured acquires after the policy's effective date. It typically provides coverage for a specified period of time, such as 30 days, and is designed to give the insured time to add the new property to the policy.

In Craig's case, since he purchased the machinery for his business and rented a storage unit to house it until he could bring it to the company, the machinery would fall under the category of newly acquired property. If Craig's insurance policy includes this coverage extension, it is likely that he would be indemnified for the loss of the machinery due to the storage unit fire.