Which clause in an insurance policy specifies the conditions under which losses will be covered?

The choice that specifies the conditions under which losses will be covered in an insurance policy is the Coverage Clause. This clause outlines the specific risks and types of losses that are included in the policy, detailing what is insured and under what circumstances a claim can be made. It essentially defines the scope of protection offered by the insurer to the policyholder.

Understanding the Coverage Clause is crucial for policyholders because it clarifies which events will trigger a payout and helps prevent misunderstandings at the time of a claim. By knowing what is covered, individuals and businesses can make informed decisions about their insurance needs and any additional coverage that may be necessary.

The other clauses, while significant within an insurance policy, have different functions. The Exclusion Clause lists exclusions or circumstances under which the insurer will not provide coverage. The Conditions Clause outlines the duties and obligations both the insurer and the insured must fulfill. The Indemnity Clause addresses the principle of restoring the insured to their pre-loss financial position, ensuring that they are compensated fairly for their losses. However, it does not define what is covered. Thus, the Coverage Clause is the correct choice for specifying the conditions under which losses will be covered.