A clause in a debt contract requiring that the borrower purchase insurance against loss of the asset financed with the loan is called a
A)collateral-insurance clause.
B)prescription covenant.
C)restrictive covenant.
D)proscription covenant.

Question

Quizplus · Accepted Answer

A restrictive covenant is a clause in a debt contract that imposes certain restrictions or requirements on the borrower, such as purchasing insurance to protect the asset financed with the loan.

A Clause in a Debt Contract Requiring That the Borrower