In insurance, what are "covenants"?

Covenants in the context of insurance refer to promises made by the insured to the insurer. These promises are typically conditions or obligations that the insured agrees to uphold as part of the insurance contract. For instance, an insured may covenant to maintain a certain level of risk management practices, report changes in risk factors promptly, or pay premiums on time.

These commitments serve to mitigate risk for the insurer and ensure that the insured adheres to practices that protect both parties. By fulfilling these covenants, the insured helps maintain the trust and functionality of the insurance agreement, which ultimately impacts the insurer's assessment of risk and the terms of coverage provided.

The other options do not accurately represent what covenants stand for in an insurance context. Conditions for premium payments relate more to the financial aspects of the policy rather than promises. On the other hand, while promises made by the insurer to the insured are crucial for defining coverage and obligations, these are typically referred to as warranties or guarantees instead of covenants. Limitations on the insured's rights are more aligned with policy exclusions or terms and conditions, rather than promises made.