Unit 19: Businessowners Policy (BOP)

Question 1

BOP Building Coverage

Answer 1

• completed additions
• permanently installed machinery and equipment
• fixtures
• personal property used to maintain or service
• additions under construction
• alterations and repairs to the buildings or structures
• materials, equipment, supplies, and temporary structures that are on or within 100 ft of the premises

Question 2

BOP Personal Property

Answer 2

• property owned and used by the insured in the business
• property of others in the insured’s care, custody, or control (not customer’s property)
• tenants’ improvements and betterments
• leased personal property that the insured has a contractual responsibility to insure
• exterior building glass
• personal property located at the described premises and in or on a building, in a vehicle, or in the open within 100 feet of the premises

Question 3

BOP Open Peril Exclusions pt 1

Answer 3

• losses resulting from the enforcement of a building ordinance or law
• earth movement
• government action
• nuclear hazard
• damage caused by failure of power or other utility services occurring away from the insured’s premises
• war and military action
• water, including flood, sewer backup, mudslides, or seepage of ground water

Question 4

BOP Open Peril Exclusions pt 2

Answer 4

• mold, wet rot, and bacteria, except as provided as an additional coverage
• explosion of any steam boilers, pipes, engines, or turbines
• dishonest or criminal acts of the insured or employees
• voluntary parting with property if induced to do so by fraud or a trick
• pollution (unless the release, discharge, or dispersal is caused by a specified cause of loss)
• damage caused by insects, birds, rodents, or other animals

Question 5

BOP Additional Coverages pt 1

Answer 5

• debris removal: 25% of loss and additional $25,000 if loss equals or exceeds
• collapse caused by: bulding glass breakage, hidden decary, hidden insect or vermin damage, weight of people or personal property, or weight of rain or snow
• loss of business income
• extra expense
• increased cost of construction
• action of civil authority: business loss when cannot access premises, begin 72 hrs after for 4 weeks

Question 6

BOP Additional Coverages pt 2

Answer 6

• forgery or alteration: max $2,500 including defense
• business income from dependent properties: $5,000
• electronic data: software and hardware, $10,000 per period
• fungi, wet rot, dry rot, and bacteria: $15,000 per period, during period
• money orders counterfeit money: $1,000
• pollutant cleanup: $10,000 per period
• preservation of property: 30 days
• fire dept service charge: $2,500
• water or other liquid material damage: not flood
• glass
• fire extinguisher recharge: $5,000 per occurrence

Question 7

Newly Acquired Coverage Extension

Answer 7

Buildings: 30 days, $250,000

Personal Property: 30 days, $100,000

Question 8

Trees and Detached Signs Coverage Extension

Answer 8

Max total of $2,500

Max per tree: $1,000

Question 9

Personal property of others (not customers) such as employee property on the premises Coverage Extension

Answer 9

$2,500

Question 10

Valuable papers and records Coverage Extension

Answer 10

$10,000

Question 11

Employee Dishonesty Optional Coverage

Answer 11

• must be discovered while policy in force
• or within one year after expiration

Question 12

Equipment Breakdown Optional Coverage

Answer 12

mechanical breakdown

Question 13

Other Optional Coverages

Answer 13

• outdoor signs
• money and securities

Question 14

BOP Deductible

Answer 14

base deductible applies to ALL building and personal property

BOP standard deductible: $500

Question 15

Business Liability Coverage

Answer 15

• bodily injury
• property damage
• personal and advertising injury
• must occur during the policy period and territory (US, possessions, and Canada)
• covers cost to defend up to policy limits

Question 16

Supplementary Payments

Answer 16

• expenses the insurance company incurs
• up to $250 for the cost of bail bonds
• reasonable expenses to assist in defending a claim or suit, including $250 per day for lost earnings
• costs the insured is required to pay because of a lawsuit
• prejudgment interest the insured is required to pay
• interest that accrues after a judgment and before it is paid

Question 17

Medical Payments

Answer 17

• doesn’t cover employees or insureds
• one year from the date of accident

Question 18

Bodily Injury and Property Damage Exclusions pt 1

Answer 18

• expected or intended injury
• assumed under contracts or agreements
• liquor liability (for insureds in manuf, distrib, selling, serving, or furnishing alcoholic beverages)
• obligations under workers’ comp, disability benefits, unemployment comp, or similar
• BI to employees that arises out of/in the course of their employment with the insured
• arising out of pollutants, including cleanup costs
• arising out of the ownership, maintenance, and use of aircraft, autos, and watercraft

Question 19

Bodily Injury and Property Damage Exclusions pt 2

Answer 19

• arising out of the use of mobile equipment in, or while practicing or preparing for, any prearranged race, speed or demolition contest, or any stunting activity
• arising from rendering or failing to render professional services
• damage to property the insured owns, rents, or occupies, or property in the insured’s care, custody, or control
• business liability or medical expenses resulting from the hazardous properties of nuclear materials

Question 20

Personal and Advertising Injury Exclusions

Answer 20

• intentional personal and advertising injury
• arises out of oral or written publication of material that was first published before the beginning of the policy period
• arises out of a criminal act committed by or at the direction of any insured
• arising out of the failure of goods, products, or services to conform with advertised quality or performance
• arising out of a wrong description of the price of goods, products, or services
• committed by insureds in the business of advertising, broadcasting, publishing, telecasting, designing websites, or providing internet search, access, content, or service
• arising out of infringement of copyright, trademark, patent, trade secret, or other intellectual property rights
• arising out of a criminal act committed by or at the direction of the insured

Question 21

Insureds

Answer 21

• named insured is an individual: includes spouse
• named insured is a partnership of individuals: includes spouses
• limited liability company: includes members and managers
• corporation: includes officers and directors
• named insured’s employees
• named insured’s representative, if the insured is deceased

Question 22

Limits of Insurance

Answer 22

• bodily injury and property damage limit per occurrence
• personal and advertising injury - limit per person or org
• no-fault medical payments - limit per person
• fire legal - limit per fire
• aggregate limits per policy period: products and completed operations aggregate & general aggregate for all other claims

Question 23

Utility services - direct damage endorsement

Answer 23

damage to property caused by interruption of utility services

Question 24

Utility services - time element endorsement

Answer 24

loss of income or extra expense caused by interruption of utility services

Question 25

Protective safe guards endorsement

Answer 25

• requires sprinklers, burglar alarm, etc.
• no coverage if not working and no prior notice given to the insurer

Question 26

Hired auto and nonowned auto liability

Answer 26

• liability for rented, leased, or borrowed autos
• liability for employee-owned vehicles
• applies only if the business has no commercial auto insurance