Which factor can lead to a coverage lapse in a commercial property insurance policy?

Failure to disclose material changes to the property can indeed lead to a coverage lapse in a commercial property insurance policy. Insurance contracts are based on the principle of utmost good faith, which requires the policyholder to fully disclose all relevant information that could impact the insurer's decision to issue a policy or the terms of coverage.

When a property undergoes significant changes—such as renovations, changes in occupancy, or any other material alterations—this information must be communicated to the insurer. If a policyholder fails to do so, it can create a situation where the risk profile of the property has changed without the insurer's knowledge. As a result, this omission can lead the insurer to consider the policy void or lapse, as they may have assessed the risk based on outdated or incomplete information.

The other options provided, like timely premium payments, regular inspections by the insurer, and strong risk management practices, contribute positively to maintaining coverage rather than leading to a lapse. Timely premium payments ensure that the policy remains active, inspections allow the insurer to reassess risk and make necessary adjustments to coverage, and strong risk management practices typically reduce the likelihood of claims, thereby reinforcing the insurer's confidence in the policyholder's risk profile.