What is the maximum amount of loss Company A would pay if assessed $40,000 under the pro rata liability provision?

The pro rata liability provision in insurance applies when there are multiple insurance policies covering the same loss. Under this provision, each insurer pays a portion of the claim based on the ratio of its coverage amount to the total coverage available.

In this scenario, if Company A is assessed $40,000 under the pro rata liability provision, it indicates that this amount represents the company’s share of the total liability based on its policy limits in relation to the overall coverage. Since the question asks for the maximum amount of loss that Company A would pay, and the amount assessed is $40,000, it confirms that this is indeed the limit of liability for Company A in this instance.

Thus, the maximum compensation that Company A would be required to pay for the loss is equal to the assessed amount of $40,000, which makes the chosen answer appropriate.