Question

Following a property loss that is covered under a business owners policy, if the insurer and insured cannot agree on the amount of the loss, what method is used to resolve the issue?

1) No-fault procedure
2) Appraisal
3) Arbitration
4) Adjudication

Answer 1

In the case of a disagreement over the amount of a loss covered by a business owners policy, appraisal is used to resolve the issue.

Step-by-step explanation:

If the insurer and the insured cannot agree on the amount of a loss covered under a business owners policy, the method used to resolve the issue is appraisal. Appraisal involves the appointment of appraisers by both parties who assess the loss independently. If the appraisers cannot agree on the amount, they select an umpire, and the appraisal process continues until a resolution is reached.