You are risk manager at Bay Engineering, Ltd. You purchased a Commercial Package Policy for your company and added one optional coverage. This option suspends the coinsurance clause and substitutes a new agreement covering any loss in the same proportion that the limit of insurance purchased bears to a value specified in the declarations. This provision is known as

A) waiver of inventory coverage.

B) inflation guard coverage.

C) agreed value coverage.

D) replacement cost coverage

In this case, will the deduction be taken for depreciation when settling a covered loss?

Explain your answers.