Which of the following is NOT one of the three steps of the indemnity agreement?

The correct answer highlights that "recovery of lost earnings" is not one of the three steps of the indemnity agreement. The concept of indemnity in insurance focuses on restoring the insured to the same financial position they were in prior to a loss, without allowing for profit. The three primary steps typically include:

1. Actual cash value at the time of loss: This involves calculating the worth of the property or item at the time it was damaged or lost, which takes into account depreciation and fair market value.

2. Interest of the insured: This refers to the insured's financial interest in the property or asset that is covered under the insurance contract. An insured must have an insurable interest in the property to receive indemnity.

3. Limit of insurance: This represents the maximum amount that an insurance policy will pay in the event of a loss. The limit is crucial as it defines the insurer's liability.

In contrast, "recovery of lost earnings" is not a step in the indemnity process; it is more associated with business interruption insurance, which is a separate area. Indemnity specifically seeks to address the value of the property or asset lost, rather than earnings that could have been generated. Thus