BOP (Businessowners Policy) CH.13

Lara's businessowners policy (BOP) shows a $500,000 limit on the covered building. What is the maximum amount she can recover for complete destruction of the building by a covered peril when the policy has been in force exactly six months?

$520,000

Alison's businessowners policy (BOP) shows a $500,000 limit on covered business personal property. She chose this limit based on her average inventory values. What is the maximum amount she can recover for complete destruction of her covered property by a covered peril when the policy has been in force exactly six months?

$625,000

Keri habitually dumps used paint cleaner on the ground behind her art shop, which is covered by an ISO businessowners policy (BOP). The solvents are a pollutant, and Keri must now spend $20,000 to have the pollutants removed. To what extent, if any, does Keri's BOP cover this expense?

Because intentional dumping is not a covered cause of loss, the BOP provides no coverage.

Gretchen's Travel Agency invites recent customers to a special presentation at which a time-share offer will be made. To relax potential buyers, she serves cocktails and snacks before and after the presentation. One of her guests has an auto accident on the way home and sues Gretchen for getting him drunk. How will the liability coverage of Gretchen's BOP respond?

Because she is not in the beverage business, Gretchen has coverage for this claim.

Shawn's ice cream parlor is insured under an ISO businessowners policy (BOP). Almost all of his customers come from the health club next door. What coverage, if any, in Shawn's policy would respond if a fire closes the health club?

Business income from dependent properties additional coverage would respond.

An imposter pretending to be Barbara engaged in questionable activities. Because the imposter's activities injured her firm's image, Barbara spent $5,000 on advertisements to restore its good reputation. What coverage for this expense might Barbara have under her Insurance Services Office, Inc. (ISO), businessowners policy (BOP)?

Her BOP will cover this expense if the identity fraud expense coverage endorsement is attached.

When vandals throw a brick through the plate glass window of Giovanni's pizza parlor, he hires a handyman to board up the broken window until the glass can be replaced. Giovanni's businessowners (BOP) policy covers his building and personal property. How much coverage does the BOP provide for these temporary repairs?

His expenses are covered, subject to the applicable limit.

The BOP's personal and advertising injury liability coverage does not apply to personal and advertising injury involving certain offenses committed by:

Internet service providers

Adrian left his workbench for a few minutes to answer the phone. When he returned, he discovered that his hot soldering iron had fallen into the wastebasket and started a fire. Adrian rents his shop from the building owner, and Adrian's businessowners policy (BOP) includes only business personal property and liability coverage. Why does Adrian's BOP cover the landlord's claim for damage to the building?

It covers a claim for tort liability.

Josephine's novelty store is protected by a businessowners policy (BOP) that covers her building and business personal property. In what situation will the personal and advertising injury liability coverage of Josephine's BOP cover a claim?

Josephine detains a suspected shoplifter who turns out to be innocent.

Nigel and Collette formed N&C Company, a partnership that is the named insured in an Insurance Services Office, Inc. (ISO), businessowners policy (BOP). For purposes of their BOP's liability coverage, which one of the following persons is not an insured?

Norris, a customer who claims N&C damaged his property

When a grease fire destroyed the kitchen of his Crispy Crunch fried chicken restaurant, Sterling was glad that his businessowners policy (BOP) included business income coverage for the period required to repair the damage. The repairs are delayed when animal rights activists, picketing outside the restraint, protest the treatment of the chickens. How will this delay affect Sterling's insurance recovery?

Sterling's business income coverage does not apply to the delay caused by strikers.

Isaac's convenience store is covered by an Insurance Services Office, Inc. (ISO), businessowners policy (BOP). Which one of the following property losses does the BOP cover?

The cigarette display goes up in smoke when Isaac's coffee machine starts a fire.

Clare, a convenience store owner, should have been suspicious when a customer asked her to make change from a $100 bill when he bought a pack of cigarettes. Now the bank tells her the $100 bill is counterfeit. Does Clare's businessowners policy (BOP) provide any coverage for this loss?

Yes, because the BOP provides up to $1,000 coverage for loss due to the insured having accepted counterfeit money.

Ida's "Hole-in-the-Mall" boutique was surprisingly popular despite its obscure location at the end of a dead-end hallway in the mall. Ida's store was not damaged, but her business came to a sudden halt when an explosion blocked access to the hallway leading to her store. Does Ida's businessowners policy (BOP) provide any coverage for her resulting loss of income?

Yes, because the BOP's business income and extra expense coverage applies when a business interruption is caused by damage to any area used to gain access to the insured's premises.

The business income and extra expense coverage in the Insurance Services Office, Inc. (ISO), businessowners policy (BOP) has:

a 12-month maximum recovery period

According to Insurance Services Office, Inc. (ISO), rules, which one of the following businesses would be eligible for coverage under a businessowners policy (BOP)?

an apartment building seven stories tall

Tricia owns and operates a gift shop in a space that she rents from Shopping Center. Tricia's businessowners policy (BOP) provides business personal property coverage but not building coverage. The shelves, cabinets, and partitions that she attached to the walls of her store

are covered by the business personal property coverage of Tricia's BOP.

Merrill's insurance agency office is insured under an Insurance Services Office, Inc. (ISO), businessowners policy (BOP). One of Merrill's customers claims that she suffered a loss because Merrill failed to provide the property insurance she asked for that would have covered the recent damage to her building. What can the insurer that wrote Merrill's BOP be expected to do?

deny coverage because of the BOP's professional liability exclusion

An extended power outage at Tyrone's Steak House would ruin thousands of dollars' worth of perishable meat in Tyrone's freezer. The business personal property coverage of his businessowners policy (BOP) provides open perils coverage that

excludes loss resulting from an interruption of power originating away from Tyrone's premises.

The building housing Kaitlin's Antique Shop is as old as her merchandise, and she is not sure it will stand much longer. The building is insured under a businessowners policy (BOP) that includes additional coverage for collapse that will apply if the building

falls down because of an insured peril.

The apartment building Laurie owns is insured under a businessowners policy (BOP). Because Laurie's policy includes building coverage but not business personal property coverage, she does not have coverage for loss or damage to:

furniture owned by a tenant

Edith would like to insure the office building she owns under a businessowners policy (BOP). According to ISO rules, Edith's building is eligible for coverage under a BOP if it

is five stories tall with 80,000 total square feet in area.

The extra expense additional coverage in an ISO businessowners policy (BOP)

is not subject to the limits of insurance.

Alex's Diner is covered under an Insurance Services Office, Inc. (ISO), businessowners policy (BOP) with no endorsements. The policy's declarations page includes limits for the building coverage and for the business personal property coverage. What kind of perils coverage does Alex's policy provide?

open perils coverage on the building and personal property

Earl tells a friend that an endorsement attached to Earl's businessowners policy (BOP) says that Earl has no coverage for a fire loss if he fails to maintain his building's automatic sprinkler system. What kind of endorsement is Earl apparently referring to?

protective safeguards endorsement

While on a business trip, Jorge rents a car from a car rental company and crashes into a wall. Jorge's businessowners policy (BOP) includes a hired auto and nonowned auto liability endorsement. The endorsement's schedule indicates coverage for hired autos but not nonowned autos. The rental company wants Jorge to pay for the damage to its car. His BOP

provides liability coverage on a hired auto but does not cover this physical damage loss.

Keri's business is protected by an Insurance Services Office, Inc. (ISO), businessowners policy (BOP) with no endorsements. Access to the premises is controlled by a computer system that locks and unlocks the doors to permit access only during normal business hours. If the control system malfunctions and allows thieves to enter the building and steal Keri's property,

the computers and data exclusion precludes coverage.

In the normal course of business, Therese signs many contracts. Which one of the following qualifies as an insured contract as defined in Therese's businessowners policy (BOP)?

the lease she signed in renting the space for her business

Whose needs are businessowners policies designed to meet?

typical small to medium-sized businesses with no unusual exposures or needs

A businessowners policy combines coverages that might otherwise be written on all the following types of forms EXCEPT:

workers compensation