80. A lumber yard includes an endorsement in its policy that the establishment will maintain 24-hour security service. The scheduled overnight security guard becomes ill and leaves the property one hour before his shift ends in order to seek medical care. The next guard arrives on time, finds that a storage section of the property is on fire, immediately calls 911, and the fire is extinguished. The storage section sustains losses that exceed the deductible by $1500. What is the status of the coverage for losses resulting from this fire?
Answer: A
The coverage is in effect because the interruption in security was unavoidable.
The circumstances surrounding the illness of the security guard were unforeseen and outside the control of the lumber yard, which means that the interruption in security service does not void the coverage.
A) The coverage is in effect because the interruption in security was unavoidable
This option is correct as it acknowledges that the interruption in security was due to an unexpected medical emergency. Since the lumber yard had made arrangements for 24-hour security and the absence was not due to negligence, the coverage remains valid.
B) The coverage is void because security was interrupted, and the policy is permanently canceled
This option is incorrect because the insurance policy does not automatically void or cancel due to an unavoidable interruption in security. The lumber yard had no control over the guard’s illness, and therefore, the policy remains active despite the temporary lapse.
C) The coverage is void because security was interrupted, but reinstated when 24-hour security is restored
This option is also incorrect. While it acknowledges that security was temporarily interrupted, it wrongly assumes that coverage is automatically void during such interruptions. The policy remains in effect as long as the interruption was unavoidable.
D) The coverage is in effect because the guard who discovered the fire reported it promptly
This option does not address the core issue of the security coverage being voided due to interruption. While prompt reporting of the fire is important, it does not negate the fact that security was interrupted, which is the key factor in determining coverage status.
Conclusion
The correct answer is justified because the interruption in security was caused by an unavoidable circumstance, specifically the illness of the guard. Other options incorrectly assume that any interruption, regardless of its nature, would void the policy, which is not the case when the interruption is beyond the control of the insured party. Thus, the coverage remains effective despite the brief security lapse.