chapter 13: business owners coverage form

The unendorsed Businessowners Policy will pay no more than what amount for the theft of jewelry?

A)$2,500 The theft of jewelry, watches, pearls, precious and semi-precious stones, bullion, gold, silver, platinum, and other precious alloys or metals is limited to $2,500 in any one loss.

Which of the following properties would not be eligible for a Businessowners Policy?

A)A dry cleaning plant that has a total of 45,000 square feet Businesses that generate sales over $6 million or that occupy more than 35,000 square feet of space are ineligible for coverage under the BOP.

The BOP policy provides the same liability coverage as which of the following policies?

A)Commercial General Liability The liability coverages available on the BOP are the same as those provided by the CGL policy, including premises and operations, personal and advertising injury, products and completed operations liability, and medical payments coverage.

Which of the following statements is false regarding the Businessowners Policy?

A)Insurance losses are settled on an actual cash value basis Losses are generally settled on a replacement cost basis.

Which of the following is true regarding the BOP's Time Element Utilities Services Endorsement?

A)It pays for loss of business income or extra expense at the described premises caused by the interruption of service at the described premises The Utilities Services Endorsement contains coverage for both direct and indirect damages. The indirect damage coverage includes business income and extra expense coverage.

Which statement is false regarding the Businessowners Policy?

A)Most insurance losses are settled on an actual cash value basis Losses are generally settled on a replacement cost basis, unless ACV coverage is selected in the declarations.

Which type of coverage does the BOP provide for preservation of property?

A)Open perils coverage for 30 days Coverage is provided for removal of endangered property for 30 days on an open-perils basis.

All of the following are true about the Limits of Liability under Section II of the BOP, except:

A)The Products and Completed Operations aggregate limit is equal to the Liability and Medical Expense limit

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 If there is other insurance applying to the loss, the Businessowners Policy, is considered excess insurance.

For how many hours after the first tremor would earth movement damage be covered under the Businessowners Earthquake endorsement?

B)168 hours Coverage extends for 168 hours after the first tremor, even if the policy expired.

All of the following are true of a Businessowners Coverage Form, except:

B)Employee dishonesty is automatically included in each policy Employee Dishonesty is not automatic. It is an option that must be selected.

All of the following are excluded under the BOP, except:

B)Increased cost of construction The Increased Cost of Construction Additional Coverage provides $10,000 coverage for costs incurred to comply with an ordinance or law regulating repairing or replacing damaged building parts.

Under a Businessowners policy, if an insured acquires a building on April 1st, it is automatically covered until which date?

B)May 1 Newly acquired or constructed property is a policy coverage extension covering each new building up to $250,000 for up to 30 days.

Which of the following is covered under Section II of the Businessowners Coverage Form?

B)Medical payments to volunteer workers

Which of the following is not an Optional Coverage under the Businessowners Policy?

B)Personal property of others that is in the insured's care, custody and control Coverage for property that is in the care, custody or control of the insured is considered business personal property and is automatically covered under the policy.

Section II of the BOP policy provides the same liability coverage as:

B)The Commercial General Liability policy The liability coverages available on the BOP are the same as those provided by the CGL policy, including premises and operations, personal and advertising injury, products and completed operations liability, and medical payments coverage.

All of the following are true regarding medical expenses coverage under the BOP, except:

B)The policy excludes funeral expense Medical expenses coverage pays necessary medical, surgical, x-ray and dental services, including prosthetic devices; and necessary ambulance, hospital, professional nursing and funeral expenses.

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?

C)25% The Businessowners Policy includes an automatic seasonal increase business personal property of 25% if the insured maintains insurance equal to 100% of the average monthly values for the preceding 12 months.

Motels may not bewritten insured by a Businessowners Policy if they exceed:

C)3 stories Motels are limited to three stories in height. They are not limited by area.

Which statement about the BOP Utilities Services Time Element Endorsement is true?

C)It pays for loss of business income or extra expense at the described premises caused by the interruption of service at the described premises

The BOP's optional coverage for employee dishonesty covers which of the following?

C)Loss to business or personal property resulting from dishonest acts of employees The Employee Dishonesty Optional Coverage protects the insured from dishonest acts of employees acting alone, or in collusion with other employees.

Each of the following is a characteristic of an eligible risk for the BOP, except:

C)Manufacturing occupancy Other ineligible risks include automobile repair or service stations, dealers, garages, places of amusement, and restaurants and bars that do not meet the restaurant eligibility rules.

Which of the following is false about the Businessowners Policy?

C)The Supplementary Payments limit is a maximum of $2,500 for all expenses incurred by the insurer Supplementary Payments include all expenses incurred by the insurer without limit.

The insurer may cancel a BOP when an insured building has been vacant or unoccupied for how many days?

D)60 The cancellation provision of the Businessowners Policy allows the insurer to cancel if the building has been vacant or unoccupied for 60 or more consecutive days.

Which of the following is not eligible for coverage under a Businessowners Policy?

D)Auto Dealerships Businesses operating in the sale, servicing, or storage of automobiles are not eligible for a Businessowners Policy.

Section III of the Businessowners Coverage Form includes:

D)Common Policy Conditions Section III of the Businessowners Coverage Form includes the Common Policy Conditions.

All of the following are covered under a BOP, except:

D)Money and securities Money and securities are not covered under a BOP unless the optional coverage is selected in the Declarations, for an additional coverage.

Which of the following would be covered under a BOP?

D)The insured is sued for injury to a competitor caused by an advertisement Businessowners liability coverage includes bodily injury, property damage, medical expense, and personal and advertising injury which would cover injury due to an offense arising out of the insured's business. Product recall, breach of contract, and employee injury are excluded.

After a claim has been paid under the Businessowners Liability Coverage, what happens to the recovery rights?

D)The rights belong to the insurer A policyholder's recovery rights are transferred to the insurer to the extent of the insurer's payments.

Under the BOP, which of the following types of property is not covered?

D)Vehicles subject to motor vehicle registration Vehicles subject to motor vehicle registration are eligible for coverage under a commercial automobile policy.

What is the method of property valuation used under the Businessowners Policy (BOP)?

D)replacement cost