Luke’s settlement check after a store fire indicates which of the following about his policy status?

• A. Has business interruption coverage
• B. Is named in the policy declarations or an endorsement
• C. Has an insurable interest in the damaged property
• D. Is the owner of the building

Answer: (B)

The main idea is that who gets a settlement check from an insurer is determined by who is named in the policy declarations or in a endorsements (such as a loss-payee designation). If Luke receives the settlement check, it indicates that he is specifically listed on the policy as the insured or as a designated payee in an endorsement. That is why the correct interpretation is that he is named in the policy declarations or an endorsement.

The other ideas aren’t proven just by receiving a check. A settlement doesn’t by itself prove business interruption coverage; it also doesn’t establish that Luke has an insurable interest (that’s a broader requirement for coverage) or that he is the owner of the building. Ownership isn’t necessary to receive payment if the policy names another form of interest or a loss-payee.