Question

Cyril recently purchased a small machining shop. When asked on his commercial property insurance application about how the property will be heated in the winter, he replies "central heat," when in fact it will be heated by a wood stove. Under which condition could the insurer deny coverage?

A. No Benefit to Bailee
B. Changes to the Policy
C. Control of Property
D. Concealment, Misrepresentation, and Fraud

Answer 1

The insurer could deny coverage under the condition of Concealment, Misrepresentation, and Fraud. Cyril's false statement on his commercial property insurance application about how the property will be heated is considered a misrepresentation of the facts. It is important to provide accurate and truthful information when filling out insurance applications.

Step-by-step explanation:

The insurer could deny coverage under the condition of Concealment, Misrepresentation, and Fraud. Cyril's false statement on his commercial property insurance application about how the property will be heated is considered a misrepresentation of the facts. By stating that the property will be heated by central heat when it will actually be heated by a wood stove, Cyril is concealing important information from the insurer.

Concealment, Misrepresentation, and Fraud are grounds for an insurer to deny coverage. Under this condition, the insurer may refuse to pay a claim or cancel the policy. It is important to provide accurate and truthful information when filling out insurance applications to avoid these consequences.