Kelsey obtains a business liability insurance policy from Loyal Insurance Company for Kelsey's Modeling & Hobby Crafts store. When an event occurs that gives rise to a claim, Loyal has a duty to

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When an event occurs that gives rise to a claim, Loyal Insurance Company has a duty to investigate to determine the facts. This is because the insurance policy is a contract between Kelsey and the insurance company, and the insurance company is obligated to investigate and handle any claims made under the policy. The insurance company may also have a duty to defend Kelsey in court if necessary, but this depends on the terms of the policy. Options B and C are incorrect because the insurance company does not file a suit against Kelsey or find a third party on whom to impose liability. Option D may be applicable if Kelsey cancels the insurance policy and is entitled to a refund of any unearned premiums.

Kelsey Obtains a Business Liability Insurance Policy from Loyal Insurance