The Businessowners Policy

Question 0

What is the ideal BOP prospect?

Answer 0

Small, well managed, one location business with easily predicted coverage needs

Question 1

What is the businessowners policy? (BOP)

Answer 1

A commercial package policy that provides property and liability insurance to certain types of small businesses.

Question 2

What types of businesses are eligible under current ISO rules?

Answer 2

Certain wholesale, processing and service, restaurant, convenience store, and contracting risks.

Question 3

In a BOP, what will the policy declarations show?

Answer 3

Policy number, name of insurer, name of producer, name and address of the named insured, and the policy period

Question 4

What are the two major coverages in a BOP?

Answer 4

Coverage A - buildings

Coverage B - business personal property

Question 5

What are the five different classes of business personal property covered?

Answer 5

1. Property owned and used by the insured in the business
2. Property of others in the insureds care, custody, or control
3. Tenants improvements and betterments
4. Leased personal property that the insured has a contractual responsibility to insure
5. Exterior building glass

Question 6

What is the property coverage on a BOP?

Answer 6

Open peril

Question 7

What are the specified causes of loss in a BOP?

Answer 7

1. Fire
2. Lightening
3. Explosion
4. Windstorm or hail
5. Smoke
6. Aircraft or vehicles
7. Riot or civil commotion
8. Vandalism
9. Leakage from fire extinguishing equipment
10. Sinkhole collapse
11. Volcanic action
12. Falling objects
13. Weight of snow, ice or sleet
14. Water damage

Question 8

What does the debris removal additional coverage do?

Answer 8

Pays for expenses to remove debris of covered property caused by a covered cause of loss during the policy period.

Question 9

What is the collapse additional coverage?

Answer 9

Collapse of a building or part of a building is covered only when it is caused by one of the specified causes of loss, building glass breakage, hidden decay, hidden insect or vermin damage, weight of people or personal property, weight of rain that collects on a roof, or use of defective materials or methods in construction, remodeling, or renovation if the collapse occurs during the course of the construction, remodeling, or renovation.

Question 10

What is the business income additional coverage?

Answer 10

The insurance company will pay for loss of business income that occurs when the insureds business operations have to be suspended after a loss and income cannot be generated.

Question 11

What is the extra expense additional coverage?

Answer 11

Allows reimbursement for additional costs an insured incurs to avoid or minimize suspending business operations after a loss

Question 12

What is the increased cost of construction additional coverage?

Answer 12

Applies only to buildings insured on a replacement cost basis. If a covered cause of loss damages a covered building, the company will pay the additional costs required to comply with an ordinance or law in repairing the damage or replacing damaged parts. Has a $10,000 limit

Question 13

What is the civil authority additional coverage?

Answer 13

Available for losses that result from actions of civil authorities. Covered is business income an insured loses when a civil authority denies the insured access to the described premises because property not at the described premises was damaged by a covered cause of loss

Question 14

What is the forgery and alteration additional coverage?

Answer 14

Applies to an insureds loss that results directly from someone forging or altering checks, drafts, and similar items made or drawn by or on the insured or the insureds agent.

Question 15

What is the business income from dependent properties coverage?

Answer 15

Covers loss of business income the insured sustains due to physical loss or damage at a dependent property from a covered cause of loss. Coverage is limited to $5,000

Question 16

What is the electronic data additional coverage?

Answer 16

Pays to replace or restore electronic data that may have been destroyed or corrupted by a covered cause of loss.

Question 17

What is limited coverage for fungi, wet rot, dry rot and bacteria?

Answer 17

Provides limited coverage for fungus, wet rot, dry rot, or bacteria that result from a specified cause of loss other than fire or lightening.

Question 18

What is the money orders and counterfeit money additional coverage?

Answer 18

Provides coverage for loss that results when an insured accepts these items in good faith and in exchange for merchandise, money, or services as part of normal business transactions.

Question 19

What is the pollutant clean up and removal coverage?

Answer 19

Provides limited coverage for costs to extract pollutants from land of water at the insureds premises as a result of a covered cause of loss

Question 20

What is the preservation of property coverage?

Answer 20

Covers the direct physical loss or damage from any cause of loss of the property has been removed to another location to preserve it from damage by a covered peril.

Question 21

What is the water or other liquid, powder or molten materials additional coverage?

Answer 21

Covers damage to a building that indirectly results from the escape of these items.

Question 22

What is the glass expenses additional coverage?

Answer 22

Covers expenses incurred to put up temporary plates or board up openings if repair or replacement of damaged glass is delayed.

Question 23

What is the interruption of computer operations additional coverage?

Answer 23

Extends the business income and extra expense coverages to include a suspension of operations caused by an interruption in computer operations caused by destruction or corruption of electronic data

Question 24

What are coverage extensions?

Answer 24

Permit an insured to extend the insurance for other specified purposes.

Question 25

What is the employee dishonesty optional coverage?

Answer 25

Coverage for loss to business personal property and money and securities that result from dishonest acts of employees

Question 26

What is the mechanical breakdown optional coverage?

Answer 26

The insurance company will pay for direct damage to covered property caused by a sudden an accidental breakdown of an object, as defined by the policy, that damages the object so it needs to be repaired or replaced

Question 27

What is the outdoor signs optional coverage?

Answer 27

Provides coverage for physical loss or damage to all outdoor signs on the premises that are owned by or in the care, custody, or control of the insured

Question 28

What is the money and securities optional coverage?

Answer 28

Applied to loss of money and securities used in the insureds business as a result of theft, disappearance, or destruction.

Question 29

What is the standard deductible for property losses?

Answer 29

$500

Question 30

What is business liability coverage?

Answer 30

Covers the insureds legal liability that arises from bodily injury, property damage, and personal and advertising injury.

Question 31

What is an indemnitee?

Answer 31

A party who is not an insured who is under contract to provide goods or services to an insured

Question 32

Who is medical expenses coverage intended to pay for?

Answer 32

The general public not the insured or insureds employees

Question 33

What are the common policy conditions?

Answer 33

Several sets of conditions that apply to the entire businessowners policy.

Question 34

What is the utility services - direct damage coverage endorsement?

Answer 34

Covers loss or damage to property caused by an interruption in water, communication, or power supply service.

Question 35

What is the utility services - time element coverage endorsement?

Answer 35

Pays for loss of business income of extra expense if damage to certain utility services property located outside the covered building by a covered cause of loss results in an interruption of service to the described premises.

Question 36

What is the protective safeguards endorsement?

Answer 36

Requires the insured to maintain the protective devices or services listed on the endorsement on specified property as a contain of the policy.

Question 37

What is the hired auto and nonowned auto liability endorsement?

Answer 37

Covers the insureds liability for:

1. Bodily injury or property damage that arises out of the maintenance or use of a hired auto by the insured or the insureds employees in the course of the insureds business
2. Bodily injury or property damage that arises out of the use of any nonowned auto in the insureds business by any person

Question 38

What is the largest office building risk that may be eligible for a business owners policy?

Answer 38

6 stories and 100,000 square feet

Question 39

What are the two major property coverages provided under a businessowners policy?

Answer 39

Buildings and business personal property

Question 40

What does the businessowners liability coverage include?

Answer 40

Bodily injury liability, property damage liability, personal and advertising injury liability, and medical expense liability