John Davis's store is worth $400,00 and is insured for $20,00. Assuming an 80% consurance clause and fire that caused $100,000 of damage, what is the liability of the insurance company?

The liability of the insurance company would be $20,000 only. It's simply because the company is only insured for $20,000 therefor the insurance company would only be paying $20,000 to John Davis' store no matter how much the damage of the fire caused. So even if the fire would cause a lot of damage and incur a lot of costs due to the repairs, losses, etc. the insurance company will only be able to reimburse the damaged company $20,000 since that is what they signed up for in the first place.