What is the first right of the insurer concerning property of others under a Bailee coverage form?

The first right of the insurer concerning property of others under a Bailee coverage form is accurately identified as the right to take ownership of the property at its appraised value. This provision exists because a Bailee coverage form is designed to protect the bailee (the party temporarily holding another party's property) against loss or damage to that property while in their care.

When a bailee has coverage for the property and a claim is made, the insurer’s ability to take ownership enables them to properly manage the loss relationships tied to the damaged property. By assuming ownership at the appraised value, they can engage in subrogation processes, where they attempt to recover losses from other parties that might also be liable for the damage or loss. This right allows for an efficient resolution process for both the insurer and the insured (the bailee).

In the context of the other choices, while covering costs, negotiating settlements, and providing legal defense are important functions of insurance, they do not represent the primary right associated with managing loss under a Bailee coverage form. The fundamental aspect focuses on taking ownership of the property to handle any claims or recoveries effectively.