The Buisnessowners Policy Flashcards
While the CPP allows the insured to choose the coverages to be included in the CPP, the business owners policy…
Prepackages a group of coverages desirable to small businesses
The eligibility rules for the BOP are more/less stringent that those for the CPP, which can be used to cover almost any commercial risk.
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What do the specific rules of eligibility deal with for the BOP?
The size of the buildings and the specific type of business involved determine what risks are eligible to be covered under a buisnessowners policy
Unless otherwise noted, eligible risks may not exceed ? square feet in total floor area or ? in annual gross sales at each location
25,000
3 million
The buisnessowners policy (BOP) is a commercial package policy that
Provides property and liability insurance to certain types of small businesses.
Some classes of risks and certain property are specifically not eligible for the businessowners policy:
Auto repair or service stations
Auto, motor home, mobile home and motorcycle dealers
Banks, buildings and loan associations; savings and loan associations; credit unions; stockbrokers, and similar
Bars and pubs
Buildings occupied wholly or partially for manufacturing
Condominium associations other than office or residential condominiums
Household personal property
Insureds whose business operations involve one or more locations that are used for manufacturing
One or two family dwellings, unless they are garden apartments where multiple units are grouped within a single area and are under common ownership, management, and control
Parking lots or garages
Places of amusement
The BOP declarations will show
The policy number, name of insurer, name of producer, name and address of the named insured, limits of insurance (for buildings and for business personal property), any optional coverages, limits of insurance for optional insurance, and the policy period
The property coverage of the BOP includes 2 major coverages:
Coverage A: Buildings
Coverage B: Business Personal Property
Coverage A: Building Coverage applies to more than just the buildings and structures at the premises structure itself. Other items covered under the building coverage include:
Completed additions
Permanently installed machinery and equipment
Fixtures, including outdoor ones, such as lawnmowers, garden hoses, and snow removal equipment
Personal property used to maintain or service buildings, structures, or the premises, including portable fire extinguishers, equipment, outdoor furniture, floor coverings, and appliances used for refrigerating, ventilating, cooking, dishwashing, and laundering
Personal property furnished by the insured in apartments, rooms, or common areas that are rented to others
The following items are also covered under the building coverage of no other insurance applies:
Additions under construction
Alterations and repairs to the buildings or structures
Materials, equipment, supplies, and temporary structures that are on or within 100 feet of the premises and being used for additions, alterations, or repairs
There are five different classes of BUSINESS PERSONAL PROPERTY COVERAGE
Property owned and used by the insured in the business
Property of others in the insureds care, custody, or control
Tenants improvements and betterments
Leased personal property that the insured has a contractual responsibility to insure
Exterior building glass
BOP BUSINESS PERSONAL PROPERTY COVERAGE (COVERAGE B)- Property is covered when it is
Located at the described premises and in or on a building, in a vehicle, or in the open within 100 feet of the premises
What does ‘tenants improvements and betterments’ mean and what are the requirements for coverage to apply
Fixtures, alterations, installations, or additions that tenants make to rented buildings in which they operate their businesses
These items must be permenantly attached to the building, acquired or made at the insureds expense, and unable to be legally removed.
Examples: when tenants have new carpeting a or light fixtures installed
The following property is not covered under the BOP:
Aircraft
Motor vehicles/vehicles subject to motor vehicle registration
Land, water, growing crops, and lawns
Outdoor fences, tress, shrubs, and plants*
Outdoor radio or television antennas, including satellite dishes, and their lead-in wiring, masts, or towers*
Money and securities*
Watercraft while afloat, including all things associated
Outdoor signs not attached to buildings*
Accounts, bills, food stamp, evidences of debt, account receivable, papers and records
Computers that are permanently installed or designed to be permanently installed in an aircraft, watercraft, motor truck, or other vehicle subject to motor vehicle registration
Electronic data*
*except as covered under an optional coverage or coverage extension
Property coverage in the BOP is provided on an ? basis. This means that the policy does what
Open peril
Covers any causes of loss that are not specifically excluded or limited
