What does the first paragraph of the BAP insuring agreement state?

• A. The insurer will pay all sums the insured must legally pay for bodily injury or property damage arising from the ownership, maintenance, or use of a covered auto, caused by an accident, and not excluded
• B. The insurer will pay medical payments for all occupants
• C. The insurer will pay for lost profits due to accidents
• D. The insurer will defend any suit regardless of coverage

Answer: (A)

The main idea being tested is the insurer’s liability promise in the BAP’s insuring agreement. The first paragraph states that the insurer will pay on behalf of the insured all sums they are legally obligated to pay as damages for bodily injury or property damage that arise from the ownership, maintenance, or use of a covered auto, caused by an accident, and not excluded by the policy. This captures the core of auto liability coverage: the insured’s legal liability to third parties for injuries or property damage caused by a covered vehicle, limited to what the policy actually covers (not excluded). Medical payments to occupants, lost profits, or a blanket defense of any suit aren’t described here—the medical payments coverage, business losses, and the defense duties are addressed in other parts or contexts of the policy, and the defense is not unconditional.