ExamFX: Chapter 18 Business Owners

The businessowners policy liability coverage will pay for necessary medical expenses of others incurred within what maximum time period?

1 year

Under businessowners policy Section I, if an insurer wants to nonrenew a policy, how many days before the expiration date must the insurer notify the mortgageholder?

10 days

If the actual values exceed the limit of insurance, the businessowners policy (BOP) contains a seasonal increase provision that automatically increases the limit of insurance for business personal property by

25%

Under businessowners policy Section I, if an insurer wants to cancel a policy for any reason except nonpayment of premium, how many days before the effective cancellation date must the insurer notify the mortgageholder?

30 days

Under the additional coverages of a BOP, property removed to protect it from loss will be covered at another location for up to

30 days.

To be eligible for businessowners policy (BOP) coverage, an office building CANNOT be higher than

6 stories.

In business income additional coverage in a BOP, the waiting period that must occur before the period of restoration may begin is

72 hours.

Which of the following is eligible for a businessowners policy?

A 6-story office building with less than 100,000 square feet total area

A businessowners policy is

A self-contained prepackaged policy.

A business income coverage form would cover all of the following situations EXCEPT

A union strike of construction workers causes the repair of the insured's building to be delayed for a period of time.

The inspections and surveys condition in a businessowners policy

Allows the insurer the right to inspect the insured's premises.

Following a property loss that is covered under a Businessowners policy, if the insurer and insured cannot agree on the amount of the loss, what method is used to resolve the issue?

Appraisal

Under a businessowners policy, an insured can cancel the policy

At any time by mailing a written notice of cancellation.

The liability coverage of the businessowners policy is written on a

Businessowners liability coverage form.

Which of the following risks are eligible for coverage under a businessowners policy (BOP)?

Condominiums

Under the examinations of books and records condition, the insurance company has the right to examine and audit the insured's books and records related to the policy

During the policy period and for up to 3 years after the termination of the policy.

In addition to the common policy conditions, all the following apply to liability coverage EXCEPT

Employers liability.

Expenses that an organization would not have incurred if business interruption had not existed are known as

Extra expenses.

Which of the following businesses would be eligible for a businessowners policy?

Hill & Morton Funeral Home

A BOP (businessowners policy) is most similar to

Homeowners.

Which of the following is defined as a covered cause of loss in businessowners property coverage?

Leakage from fire-extinguishing equipment

A policy condition that states if a policy is broadened with no additional premium, then the expanded coverage automatically will be applied to all policies of the same type is known as

Liberalization clause.

All of the following would be covered under the medical expense coverage of a businessowners policy EXCEPT

Mental health counseling.

Coverage territory of the businessowners policy (BOP) includes all of the following EXCEPT

Mexico.

Which of the following best describes business income?

Net profit or loss that would have incurred, plus normal operating expenses, including payroll, that continues during the suspension

Which of the following watercraft will NOT be covered by business liability insurance?

Owned watercraft 53 feet long

Which of the following limits, shown in the declarations of a policy, applies to medical expenses?

Per person

After a loss, an insured covered by a business property coverage is NOT required to

Reconstruct for the insurer a timeline of activities leading up to the loss for use in an investigation.

A company has a businessowners policy on a building with an estimated replacement cost of $300,000. The company carries $150,000 of insurance. If a loss occurs, how much will the insured company be paid?

The coinsurance formula would apply

Under a businessowners policy, the inspections and surveys condition specifies all of the following EXCEPT

The insurer does not have the right to inspect the insured's property and operations.

The most the insurer will pay for a loss under a businessowners policy is

The limit of insurance after the deductible is paid.

The members of a limited liability company are insureds under a businessowners policy if

The limited liability company is designated as the named insured.

The cancellation provision in a businessowners policy specifies all of the following EXCEPT

The method of transferring the owner's rights.

According to businessowners policy Section I, which of the following is NOT a condition to be met for the terms of the policy to apply to mortgageholders?

The mortgageholder must petition the state department of insurance for named status.

All of the following statements are true regarding fire department service charge additional coverage under the businessowners policy EXCEPT

This coverage limit pays in place of the limit of insurance shown in the declarations.

Which common policy condition prohibits the insured from changing the rights or duties as defined under the policy to any other person or entity without the written consent of the insurance company?

Transfer of rights and duties under the policy

Which of the following is NOT settled on an actual cash value basis while covered under the business property coverage form?

Valuable papers and records

Which of the following is NOT an optional coverage available in a BOP?

Workers compensation

An advertising company has its annual holiday party for employees and customers, after which a customer who had too much to drink is involved in an automobile accident. Occupants of the other car involved in the accident sue the company for serving the customer too much alcohol. Will the company's businessowners policy provide coverage?

Yes, none of the exclusions will apply.