Chapter 15 - Businessowners Coverage Form

An insured's Businessowners policy provides coverage for sums the insured is legally obligated to pay as damages due to bodily injury, property damage, or personal and advertising injury. This is provided by which coverage under Section II? A Medical expenses B Fire legal liability C Supplementary payments D Business liability

Business liability

An unendorsed Businessowners policy with no optional coverages covers which of the following types of property? A Automobiles used in the business B Land and growing crops C Completed additions D Motor trucks that deliver the insured's goods

Completed additions

Under the BOP, the Valuable Papers and Records Coverage Extension provides: A Coverage for losses that occur on and off the premises B Only on-premises coverage C Unlimited coverage for losses that occur on the premises D Only off-premises coverage

Coverage for losses that occur on and off the premises

Under Section II of the Businessowners Coverage Form, which of the following is excluded from coverage? A Damage to the insured's property or work B The cost of defending the insured C The insured's fire legal liability D A personal injury sustained by a third party and committed in the coverage territory during the policy period

Damage to the insured's property or work

The deductible applicable to the BOP's property coverages would apply to which of the following Additional Coverages? A Business Income B Debris Removal C Extra Expense D Civil Authority

Debris Removal

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

Dental lab

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

Direct loss to electronic data

Under the BOP, which of the following is not an Optional Coverage? A Electronic Data B Outdoor Signs C Money and Securities D Employee Dishonesty

Electronic Data

Which coverage is not automatically provided by the Businessowners Coverage Form as an Additional Coverage? A Pollutant clean-up and removal B Equipment breakdown protection C Business income D Increased cost of construction

Equipment breakdown protection

Which of the following would be an eligible risk under the BOP? A Fast food restaurant B Manufacturer C Auto repair shop D Small amusement park

Fast food restaurant

The BOP will exclude all of the following losses, except: A Rain damage to exposed property B Damage to flooring because of continuous water seepage C Rusting on covered appliances D Fire damage resulting from an artificially generated electricity loss

Fire damage resulting from an artificially generated electricity loss

All of the following statements regarding medical expenses coverage under the BOP are correct, except: A Funeral expenses are not covered as medical expenses B Medical expenses incurred within one year of the date of the accident are covered C Payment of medical expenses is made regardless of who is at fault D Injuries to others resulting from accidents on premises the insured owns or rents, or due to the insured's operations, are covered

Funeral expenses are not covered as medical expenses

If a Businessowners policy does not include any Optional Coverages, which of the following is a covered cause of loss to a steam boiler or steam engine? A Gas explosion inside a furnace B Landslide C Off-premises utility failure D Governmental action

Gas explosion inside a furnace

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

Growing crops

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 Business income and extra expense C Liability arising out of insured contracts D Hired auto and non-owned auto liability

Hired auto and non-owned auto liability

A loss caused by which of the following would be automatically covered under a Businessowners policy? A Off-premises power failure B Increased cost of construction C Earth movement D Mechanical breakdown

Increased cost of construction

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

Loss caused by employee theft

Which of the following property losses is covered by an unendorsed Businessowners policy? A Loss of a building due to collapse B Rain damage to personal property in the open C Loss to equipment due to errors during installation or testing D Significant building damage due to an insect infestation

Loss of a building due to collapse

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

May be individually scheduled or written as a blanket limit

As defined by the Businessowners Coverage Form, valuable papers and records include all of the following, except: A Mortgages B Money and securities C Films D Manuscripts

Money and securities

The BOP's Money and Securities Optional Coverage will cover: A Money and securities against theft, disappearance, or destruction B Accounts receivable records necessary to prove amounts owed the insured C All business personal property D Money or securities stolen employees

Money and securities against theft, disappearance, or destruction

The BOP automatically provides a number of Additional Coverages, including coverage for all of the following, except: A Pollution clean-up and removal B Off-premises utility failure C Increased cost of construction D Debris removal

Off-premises utility failure

When a proper entry is made on the Declarations page of a Businessowners policy, the Outdoor Signs Optional Coverage would cover all outdoor signs: A Against named perils B On and off the insured premises C Only if attached to an insured building D On an open perils basis

On an open perils basis

In which section of the BOP would coverage for equipment breakdown be found? A Additional Coverages B Coverage Extensions C Optional Coverages D Endorsements

Optional Coverages

Under the Utility Services - Time Element Endorsement on the BOP, insurers may only cover a loss if the damaged utility services property that caused the utility interruption is located: A Inside of a covered building B Off the insured premises C Outside of a covered building D In the open, within 100 feet of a covered building

Outside of a covered building

Which statement regarding medical expenses coverage under Section II of the Businessowners Coverage Form is not correct? A Payments are made to insureds or people the insured hires to do work B Medical expenses incurred and reported within 1 year of the accident are covered C Expected or intended bodily injury or property damage is excluded D Payments are made regardless of fault

Payments are made to insureds or people the insured hires to do work

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 Per fire limit C Split limits D Per person limit

Per fire limit

The BOP automatically provides coverage for outdoor signs attached to covered buildings. Each sign is subject to what limit of insurance? A $2,500 B $1,000 C $2,000 D $500

$1,000

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 $100 B $1,000 C $250 D $2,500

$1,000

Which of the following is not an Additional Coverage under the BOP? A Forgery or Alteration B Business Income C Personal Effects D Collapse

Personal Effects

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

Processing or copying errors

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

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

Which of the following is a duty of the insured in the event of a property loss covered by a Businessowners policy? A Abandon damaged property to the insurer B Immediately hire an appraiser to appraise the loss C Provide a prompt notice of loss to the insurer D Resume business operations within 90 days after the loss

Provide a prompt notice of loss to the insurer

Under a Businessowners policy, medical expenses coverage: A Provides coverage without regard to negligence B Is written in place of bodily injury liability coverage C Prohibits further action for recovery after acceptance of payment D Pays only sums for which the insured is legally liable

Provides coverage without regard to negligence

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 Coverage for hired and non-owned auto liability is available by endorsement C Liability coverage is not subject to the coverage forms used for Commercial General Liability policies D Supplementary payments include coverage for first-aid expenses

Supplementary payments include coverage for first-aid expenses

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

Tenant's improvements and betterments

Which of the following statements about the limits of liability under Section II of the BOP is NOT correct? A The Products-Completed Operations Aggregate limit is equal to the Liability and Medical Expense limit B The Damage to Premises Rented to You limit applies only to premises rented to the insured C The Medical Expense limit is a per person limit D The Liability and Medical Expense limit applies per person or organization for personal injury claims

The Products-Completed Operations Aggregate limit is equal to the Liability and Medical Expense limit

Which statement is true regarding inspections and surveys under the BOP? A The insurer has the right, but is not obligated, to make inspections and surveys at any time B The insurer is obligated to make an inspection when the policy is issued C Inspections and surveys may be conducted only upon permission of the insured D The insurer has the right, but is not obligated, to make health or safety inspections

The insurer has the right, but is not obligated, to make inspections and surveys at any time

Under the Businessowners policy, if there is other insurance covering the same loss, how will the policy respond? A The insurer will pay only for the amount of covered loss or damage in excess of the amount due from that other insurance B The Businessowners policy does not pay if there is other insurance applicable to the loss or damage C The Businessowners policy pays 50% of the loss or damage D The Businessowners policy will pay its proportional share of the loss or damage

The insurer will pay only for the amount of covered loss or damage in excess of the amount due from that other insurance

Under the Businessowners Coverage Form, which of the following statements about the policy deductible is correct? A The deductible applies per occurrence, regardless of the number of locations affected B The standard deductible is a flat deductible of $500 C The deductible applies to all Additional Coverages D The deductible is typically written as a percentage of the limit applying to the loss

The standard deductible is a flat deductible of $500

Under the BOP, the Money and Securities Optional Coverage would cover which of the following? A Accounts receivable records B Theft of contracts representing money C Theft of currency by employees D Destruction of business personal property

Theft of contracts representing money

The BOP defines securities to include all of the following, except: A Evidences of debt B Tokens C Non-negotiable instruments representing money D Traveler's checks

Traveler's checks

Under the Businessowners Coverage Form, legal action may be brought against the insurer within: A Three years of the loss B Two years of the loss C Four years of the loss D One year of the loss

Two years of the loss

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 Protective Safeguards B This coverage is not available as an endorsement C Utility Services - Direct Damage D Utility Services - Time Element

Utility Services - Direct Damage

Under a Businessowners policy, all of the following types of property are covered by Section I, except: A Buildings and structures at the premises B Watercraft used for business purposes C Business personal property used in the insured business D The property of others that is in the insured's care, custody, or control

Watercraft used for business purposes

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

Workers' Compensation

After a storm, ABC Bakery suffers the following losses: $500 in damage to a free-standing sign, $500 in damage to a fence, and $1,500 in damage to a decorative Japanese maple tree. How much will ABC Bakery's BOP pay for these losses if the policy includes the Outdoor Property Coverage Extension? A $3,000 B $2,000 C Zero D $2,500

$2,000

An unendorsed Businessowners policy will pay no more than what amount for the theft of jewelry? A $3,500 B $2,500 C $5,000 D $7,500

$2,500

After a building loss, the insured on a Businessowners policy incurs extra expenses to minimize the suspension of business. Extra expense coverage is provided during the period of restoration and for up to: A 6 months after the direct physical loss B 9 months after the direct physical loss C 12 months after the direct physical loss D 3 months after the direct physical loss

12 months after the direct physical loss

Under Section I - Property Coverages of a Businessowners policy, which of the following statements about conditions is correct? A A breach of policy conditions will only affect coverage at locations where the breach exists B A breach of policy conditions at one location will eliminate coverage at all locations C Property coverages are subject to a 100% coinsurance provision D Buildings that use less than 50% of the total square footage are considered vacant

A breach of policy conditions will only affect coverage at locations where the breach exists

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

An automatic 90% coinsurance clause

The Businessowners Coverage Form covers property temporarily stored in another location to protect it from a covered peril for how many days? A 10 B 15 C 60 D 30

30

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

8%

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

A satellite dish located on the roof of an insured building

Section II of a Businessowners policy provides the same liability coverage as a: A Professional Liability policy B Commercial General Liability policy C Business and Personal Property policy D Commercial Inland Marine policy

Commercial General Liability policy

n order for the BOP's Increased Cost of Construction Additional Coverage to apply, the increased costs must be incurred to comply with an ordinance or law related to: A Building use and occupancy B Removal of debris after building collapse C Pollution clean-up and removal D Construction or repair of buildings

Construction or repair of buildings

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

Covered, beginning 72 hours after the fire loss

Which of the following best describes the purpose of the Protective Safeguards Endorsement available for Businessowners policies? A The endorsement simply describes the safeguards installed at the premises B The policy will not pay for sprinkler damage if the safeguards were impaired for more than 72 hours before the onset of the fire C The endorsement states that modifications to the safeguards may be made only with the permission of the insurer D The insured is required to maintain the safeguards listed in the endorsements such as automatic sprinkler systems or security services

The insured is required to maintain the safeguards listed in the endorsements such as automatic sprinkler systems or security services

A business is protected by a Businessowners policy. After a fire, electronic data is corrupted, causing an interruption of computer operations. As an Additional Coverage, business income and extra expense coverages are extended to apply to the suspended of operations, up to what amount of insurance? A $1,000 B $500 C $10,000 D $2,500

$10,000

A business is protected by a Businessowners policy. After a fire, electronic data is corrupted, causing an interruption of computer operations. As an Additional Coverage, business income and extra expense coverages are extended to apply to the suspended of operations, up to what amount of insurance? A $500 B $10,000 C $1,000 D $2,500

$10,000

Under the BOP, if debris removal expenses exceed the limit of liability, the Debris Removal Additional Coverage provides how much additional insurance to cover remaining debris removal expenses? A $25,000 B None C $5,000 D $15,000

$25,000

A Businessowners policy will cover the actual loss of business income after a loss for up to: A 12 months B 45 days C 6 months D 60 days

12 months

For how many hours after the first tremor would earth movement damage be covered under the Earthquake Endorsement attached to a Businessowners policy? A 24 hours B 168 hours C 72 hours D 144 hours

168 hours

Under the BOP, if coverage for business property equals 100% of the average monthly values for the preceding 12 months, an automatic increase of what amount is provided to offset seasonal variations in stock values? A 5% B 25% C 10% D 15%

25%

Under the BOP, the insurer may examine and audit books and records at any time during the policy period and up to how many years following policy termination? A 1 B 5 C 7 D 3

3

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

30

The period of restoration applying to business income coverage under the BOP begins: A 60 hours after a direct physical loss B Immediately after a direct physical loss C 24 hours after a direct physical loss D 72 hours after a direct physical loss

72 hours after a direct physical loss

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

A package policy offering property and liability coverages

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

An employee using an auto they own

An insured protects their business on a Businessowners policy that includes the Equipment Breakdown Protection Optional Coverage, and the business also has a separate Equipment Breakdown Protection policy. In the event of a mechanical breakdown to covered equipment, equipment breakdown coverage provided by the BOP is: A Primary coverage with the Equipment Breakdown Protection policy, with losses shared on a pro rata basis B Excess coverage that applies after the Equipment Breakdown Protection policy exhausts its limits C Primary coverage that applies before the Equipment Breakdown Protection policy responds D Primary coverage with the Equipment Breakdown Protection policy, with losses shared on a contribution by equal shares basis

Excess coverage that applies after the Equipment Breakdown Protection policy exhausts its limits

In order for coverage for the increased cost of construction to apply, a Businessowners policy must: A Insure the building on a replacement cost basis B Insure the building on an actual cash value basis C Insure both the building and business personal property at replacement cost D Add coverage by endorsement

Insure the building on a replacement cost basis

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 while in transit C Coverage extends to property in vehicles within 500 feet of the premises D It is covered only while within the building or an enclosed structure on the premises

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

Fragile articles insured under a Businessowners policy are insured against specified causes of loss. All of the following perils are included in the policy's definition of specified causes of loss, except: A Falling objects B Landslide C Riot or civil commotion D Sinkhole collapse

Landslide

The Businessowners Coverage Form includes business liability coverage for the insured's: A Employers liability B Liability assumed under an insured contract C Auto liability D Liquor liability

Liability assumed under an insured contract

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

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 One of the insured's products is recalled due to a mechanical imperfection B The insured is sued for injury to a competitor caused by an advertisement C One of the insured's employees is injured on the job D The insured violates a contract with a competitor agreeing not to advertise in their zip code

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

As defined by the Businessowners Coverage Form, personal injury includes all of the following offenses, except: A Unfair discrimination B False arrest or detention C Slander or libel D Invasion of privacy

Unfair discrimination

The Resumption of Operations condition requires that the insured do which of the following? A Return to the building within 60 days B Replace damaged property on a reimbursement basis C Submit a proof of loss within 30 days D Use damaged property to resume operations

Use damaged property to resume operations