What is the deductible amount per occurrence under ABC, Inc.'s Commercial Crime coverage?

What is the deductible amount per occurrence under ABC, Inc.'s Commercial Crime coverage?

• A. $500
• B. $1,000
• C. $1,500
• D. $2,000

Answer: (B)

In the context of Commercial Crime coverage, the deductible represents the portion of a loss that the insured must pay out-of-pocket before the insurance policy kicks in to cover the remaining amount. For ABC, Inc., the specific deductible amount per occurrence is set at $1,000. This means that if ABC, Inc. experiences a covered crime loss, they will need to absorb the first $1,000 of that loss. This deductible structure is quite common in commercial insurance policies, where higher deductibles can sometimes reduce premiums but also increase the financial responsibility of the insured in case of a claim. Understanding the deductible amount is crucial for businesses because it affects cash flow and risk management strategies, as they must plan for potential losses knowing they have to cover this initial expense before their insurance coverage takes effect.

In the context of Commercial Crime coverage, the deductible represents the portion of a loss that the insured must pay out-of-pocket before the insurance policy kicks in to cover the remaining amount. For ABC, Inc., the specific deductible amount per occurrence is set at $1,000.

This means that if ABC, Inc. experiences a covered crime loss, they will need to absorb the first $1,000 of that loss. This deductible structure is quite common in commercial insurance policies, where higher deductibles can sometimes reduce premiums but also increase the financial responsibility of the insured in case of a claim.

Understanding the deductible amount is crucial for businesses because it affects cash flow and risk management strategies, as they must plan for potential losses knowing they have to cover this initial expense before their insurance coverage takes effect.