What specifies the obligations of both the insured and insurer?

The correct answer focuses on the "Conditions" section of an insurance policy, which outlines the obligations and responsibilities of both the insured and the insurer within the contract. This part of the policy defines what each party must do or fulfill for the contract to be valid. For example, it may specify the procedures for filing a claim, the duty to cooperate during investigations, the right of the insurer to inspect property, and other critical responsibilities that govern the relationship and enforceability of the insurance agreement.

Understanding the conditions is vital for both parties because failure to adhere to these terms can result in claims being denied or coverage being voided. This section establishes a clear framework ensuring that all parties are aware of their roles, helping to mitigate disputes and misunderstandings about the policy's execution.

The other components of the policy, such as the declarations, insuring agreements, and exclusions, serve different purposes. Declarations provide specific information about the policy, including the insured's details and coverage limits. Insuring agreements summarize what the policy will cover but do not detail obligations. Exclusions specify what is not covered under the policy. While all these elements are essential for understanding an insurance policy, "Conditions" is the best choice for describing the obligations of both parties.