Chapter 15

Which of the following is covered as business personal property under the BOP? A. Carpeting B. Tenant's improvements and betterments C. Outdoor furniture D. Permanently installed machinery

B. Tenant's improvements and betterments

Businessowners Policy

- Small to med in size - less than $6million in annual gross - occupy less than 35,000 sq ft

Under the Outdoor Property Coverage Extension available on the Businessowners Coverage Form, what limit of insurance is available for loss of any one tree, shrub, or plant? A. $1,000 B. $2,500 C. $250 D. $100

A. $1,000

The Valuable Papers and Records Coverage Extension on a Businessowners policy provides what amount of coverage for off-premises physical loss to valuable papers and records? A. $5,000 B. $0 C. $1,000 D. $10,000

A. $5,000

An insured has commercial property and liability coverage under a Businessowners policy. Payments for which of the following liability claims may not reduce the General Aggregate limit of liability? A. Fire legal liability B. Personal and advertising injury liability C. Bodily injury liability D. Property damage liability

A. Fire legal liability

Which of the following is true regarding business personal property under a BOP? A. It is covered when located in or on the building at the described premises, or in the open within 100 feet of the premises B. It is covered only while within the building or an enclosed structure on the premises C. Coverage extends to property in vehicles within 500 feet of the premises D. It is covered while in transit

A. It is covered when located in or on the building at the described premises, or in the open within 100 feet of the premises

Which statement about the BOP Utilities Services - Time Element Endorsement available for Businessowners policies is correct? A. It pays for loss of business income or extra expenses incurred at the described premises caused by the interruption of service at the described premises B. It pays for loss to covered property described in the schedule caused by interruption of service C. It pays for loss to overhead transmission lines indicated in the schedule D. It increases the limit of insurance by the amount shown in the endorsement

A. It pays for loss of business income or extra expenses incurred at the described premises caused by the interruption of service at the described premises

Which of the following would not be covered under a Businessowners policy unless specifically activated on the Declarations page? A. Loss caused by employee theft B. Loss of business income after a fire loss to the building C. Loss to exterior building glass D. Loss caused by the insured accepting counterfeit money in good faith

A. Loss caused by employee theft

Business liability coverage provided by Section II of the BOP includes all of the following coverages, except: A. Medical expenses B. Liability assumed under an insured contract C. Personal and advertising injury D. Bodily injury and property damage

A. Medical expenses

Building coverage under Section I covers all of the following personal property, except: A. Personal property of others in the insured's care B. Refrigerators C. Outdoor furniture D. Floor coverings

A. Personal property of others in the insured's care

Which of the following causes of loss is not covered by the Valuable Papers and Records Coverage Extension on the Businessowners Coverage Form? A. Processing or copying errors B. Fire or lightning C. Collapse D. Windstorm or hail

A. Processing or copying errors

Which of the following is considered an insured by the Hired Auto and Non-owned Auto Liability Endorsement? A. The named insured using a rental car for business purposes B. An employee using a hired auto without the named insured's permission C. A partner using an auto they own D. An executive officer using an auto their spouse owns

A. The named insured using a rental car for business purposes

As provided by a Businessowners policy, the Fire Department Service Charge Additional Coverage covers the insured's fire department service charges assumed prior to the loss up to: A. $5,000 B. $2,500 C. $1,000 D. $500

B. $2,500

Within how many days after an insured acquires new business property must the property be added to the BOP policy? A. 20 B. 30 C. 45 D. 60

B. 30

Who of the following is not considered an insured under a Businessowners policy? A. Any person while acting as the named insured's real estate manager B. Anyone driving the named insured's mobile equipment on public roads, without the named insured's permission C. The legal representative, if the named insured dies D. Employees of the named insured, while acting within the scope of their employment

B. Anyone driving the named insured's mobile equipment on public roads, without the named insured's permission

Which of the following coverages is not included in either of the Utility Services endorsements available to Businessowners policies? A. Loss due to interruption of water supply coverage B. Direct loss to electronic data C. Direct loss to covered property D. Business income loss due to the interruption of utility services

B. Direct loss to electronic data

The BOP may be cancelled by which of the following insureds? A. Owner B. First named insured C. Any partner D. Named insured

B. First named insured

Coverage for which of the following can only be provided by a Businessowners policy by adding an endorsement? A. Personal and advertising injury liability B. Hired auto and non-owned auto liability C. Liability arising out of insured contracts D. Business income and extra expense

B. Hired auto and non-owned auto liability

A dental lab protected by an unendorsed Businessowners policy is damaged by a fire. Hoping to minimize the suspension of business, the lab incurs extra expenses to move to a temporary location and resume business. These extra expenses are covered during the period of restoration, which begins: A. 24 hours after the fire loss B. Immediately after the fire loss C. 72 hours after the fire loss D. 48 hours after the fire loss

B. Immediately after the fire loss

Under Section II of the Businessowners Coverage Form, all of the following are excluded, except: A. Liability arising out of the ownership, maintenance, or use of a commercial watercraft B. Personal and advertising injury liability C. Damage to others while loading or unloading an auto D. Liability arising out of the ownership, maintenance, or use of a commercial auto

B. Personal and advertising injury liability

Under the Loss Payment condition, what is the method of property valuation used by the Businessowners policy? A. Actual cash value B. Replacement cost C. Stated value D. Depreciation

B. Replacement cost

For an insured to have the Increased Cost of Construction Additional Coverage apply to a loss, the loss payment basis of the building must be: A. Open perils basis B. Replacement cost basis C. Agreed value basis D. Actual cash value basis

B. Replacement cost basis

Which of the following statements about liability coverage provided by a Businessowners policy is NOT correct? A. Defense costs are paid in addition to the limits of liability B. Supplementary payments include coverage for first-aid expenses C. Coverage for hired and non-owned auto liability is available by endorsement D. Liability coverage is not subject to the coverage forms used for Commercial General Liability policies

B. Supplementary payments include coverage for first-aid expenses

The spouse of which of these persons is not considered an insured under Section II of the BOP? A. Joint venture partner B. Trustee C. Sole proprietor D. Partner

B. Trustee

An insured has a Businessowners policy and wants coverage for physical losses to covered property caused by the interruption of water, communication, or power supply services. This can be provided by which endorsement? A. This coverage is not available as an endorsement B. Utility Services - Direct Damage C. Utility Services - Time Element D. Protective Safeguards

B. Utility Services - Direct Damage

Which of the following coverages is not available under a Businessowners policy? A. Property coverage B. Workers' Compensation C. Time element coverages D. Liability coverage

B. Workers' Compensation

The insured may extend BOP coverage to insure personal property in transit off the described premises for up to: A. $2,000 B. $7,500 C. $10,000 D. $1,000

C. $10,000

The Valuable Papers and Records Coverage Extension on a Businessowners policy provides what amount of coverage for off-premises physical loss to valuable papers and records? A. $10,000 B. $0 C. $5,000 D. $1,000

C. $5,000

The Additional Coverage for business income on a BOP pays for the actual loss of business income for up to how many months after the date of the direct physical damage to the property? A. 24 months B. 6 months C. 12 months D. 18 months

C. 12 months

The limit of insurance applying to building coverage provided by the BOP automatically increases by: A. 5% each year B. 31% each year C. 8% each year D. 20% each year

C. 8% each year

Which of the following is considered property not covered by the BOP? A. Outdoor furniture B. Personal property leased by the insured C. A satellite dish located on the roof of an insured building D. Landlord's furnishings located in common areas

C. A satellite dish located on the roof of an insured building

All of the following individuals are an insured under the BOP, except: A. The insured's legal representative if the insured dies B. Any person acting as the named insured's real estate manager C. A sole proprietor's minor child D. The manager of a limited liability company

C. A sole proprietor's minor child

All of the following are considered an insured under the Hired Auto and Non-owned Auto Liability Endorsement on a Businessowners policy, except: A. The named insured using a non-owned auto B. An executive officer using a non-owned auto that is owned by an employee C. An employee using an auto they own D. An employee using a hired auto with the named insured's permission

C. An employee using an auto they own

A funeral home protected by an unendorsed Businessowners policy is damaged by a fire. Actual loss of business income is: A. Covered, beginning 48 hours after the fire loss B. Not covered by the BOP C. Covered, beginning 72 hours after the fire loss D. Covered, beginning 24 hours after the fire loss

C. Covered, beginning 72 hours after the fire loss

Which of the following is an eligible risk under the Businessowners Coverage Form? A. Manufacturer B. Auto dealer C. Dental lab D. Savings and loan association

C. Dental lab

The definition of money provided by the Businessowners policy includes all of the following, except: A. Coins B. Currency C. Evidences of debt D. Traveler's and register checks

C. Evidences of debt

Which of the following is considered property not covered by Section I of a BOP? A. Appliances used for refrigeration B. Completed additions C. Outdoor fences D. Personal property in common areas

C. Outdoor fences

Which of the following is covered as business personal property under the BOP? A. Permanently installed machinery B. Carpeting C. Tenant's improvements and betterments D. Outdoor furniture

C. Tenant's improvements and betterments

Under a Businessowners policy, all of the following statements about limits applying to liability coverage are correct, except: A. The Medical Expenses limit applies per person B. The limit applying to bodily injury and property damage losses is written on a per occurrence basis C. The Damage to Premises Rented to You limit is written on a per person basis D. The limit applying to personal and advertising injury losses applies per person or organization

C. The Damage to Premises Rented to You limit is written on a per person basis

Business liability coverage provided by a Businessowners policy would cover which of the following? A. The insured violates a contract with a competitor agreeing not to advertise in their zip code B. One of the insured's employees is injured on the job C. The insured is sued for injury to a competitor caused by an advertisement D. One of the insured's products is recalled due to a mechanical imperfection

C. The insured is sued for injury to a competitor caused by an advertisement

Under Section II of the BOP, the Duties in the Event of Occurrence, Offense, Claim, or Suit condition states that insureds must do all of the following, except: A. Cooperate with the insurer's investigation, settlement, or defense B. Authorize the insurer to obtain the insured's records C. Voluntarily incur expenses or make payments D. Immediately send copies of legal papers related to a claim or suit

C. Voluntarily incur expenses or make payments

Generally, businesses eligible for a Businessowners policy cannot make more than what amount in annual gross sales? A. $2 million B. $8 million C. $4 million D. $6 million

D. $6 million

To account for inflation, Businessowners policies automatically increase the building limit by what percentage annually? A. 10% B. 5% C. 3% D. 8%

D. 8%

Under Section II of the BOP, who is covered for medical expenses after being injured while at an insured premises? A. A person taking part in athletics B. A tenant of the insured C. A cleaning crew hired by the insured D. A client of the insured

D. A client of the insured

The Businessowners policy is best described as: A. A package policy offering coverage against all risks faced by a business B. A monoline policy offering only property coverages C. A monoline policy offering only liability coverages D. A package policy offering property and liability coverages

D. A package policy offering property and liability coverages

All of the following are included in Section I of the Businessowners Coverage Form, except: A. An automatic increase in business personal property coverage to offset seasonal variations in stock B. An automatic increase in the limit of insurance for the building to offset inflation C. Business income and extra expense coverages D. An automatic 90% coinsurance clause

D. An automatic 90% coinsurance clause

A bookstore is insured has building and business personal property coverage provided by a Businessowners policy. After the store closes, the manager notices that several counterfeit bills were used to purchase items, and the associate had accepted them in good faith. The store's Businessowners policy will: A. Cover the loss up to $5,000 B. Cover the loss up to $2,500 C. Deny coverage, as the insured needs a Commercial Crime policy D. Cover the loss up to $1,000

D. Cover the loss up to $1,000

Which of the following is not an Additional Coverage provided by the BOP? A. Business income B. Interruption of computer operations caused by a virus C. Electronic data valued at $10,000 D. Errors or omissions in storing data

D. Errors or omissions in storing data

The Outdoor Property Coverage Extension available on a Businessowners policy will not pay for which of the following? A. Trees, shrubs, and plants B. Radio and television antennas C. Unattached signs D. Growing crops

D. Growing crops

Under Section I of a Businessowners policy, the applicable limits of insurance: A. Are not subject to certain increases during the policy period B. Must be written as a blanket limit applying to all insured property C. Must be scheduled for each building individually D. May be individually scheduled or written as a blanket limit

D. May be individually scheduled or written as a blanket limit

A fast-food restaurant is covered by a Businessowners policy. Under the policy's liability coverages, the insured must: A. Incur expenses related to the claim as the insured sees fit B. Record the specifics of a claim within 60 days of the claim being made C. Send copies of any demands or legal papers within 90 days of receiving them D. Notify the insurer as soon as practicable of an occurrence or offense that may result in a claim

D. Notify the insurer as soon as practicable of an occurrence or offense that may result in a claim

The Damage to Premises Rented to You limit under the Businessowners Coverage Form may be subject to which of the following type of limit? A. Combined single limit B. Split limits C. Per person limit D. Per fire limit

D. Per fire limit

Under Section I of a Businessowners policy, which of the following is covered under business personal property coverage? A. Floor coverings B. Outdoor furniture C. Permanently installed machinery and equipment D. Property of others in the insured's care, custody, or control

D. Property of others in the insured's care, custody, or control

Businessowners Coverage Form Sections

Section I - Property (open perils) Section II - Liability Section III - Common Policy Conditions