Insurance Licensing - Chapter 13: Businessowners Coverage Form

The Earthquake endorsement to the BOP provides that coverage continues for how long after a policy expires? a. 168 hours b. 36 hours c. 24 hours d. 48 hours

a. 168 hours

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. 3 b. 1 c. 5 d. 7

a. 3

The BOP covers property while it is being temporarily stored in another location for how many days? a. 30 b. 60 c. 15 d. 10

a. 30

The Named Perils endorsement: a. Changes the open perils coverage to named perils coverage b. Extends bodily injury and property damage liability to the use of any non-owned auto c. Provides coverage for damage caused by the interruption of power to the insured premises d. Excludes hired and non-owned auto liability coverage

a. Changes the open perils coverage to named perils coverage

The BOP policy provides the same liability coverage as which of the following policies? a. Commercial General Liability b. Business & Personal Property c. Commercial Inland Marine d. Commercial Auto

a. Commercial General Liability

Which of the following is an eligible risk under the BOP? a. Auto repair shop b. Manufacturer c. Fast food restaurant d. Small amusement park

c. Fast food restaurant

Each of the following standard limitations under the BOP's Section I - Property limits of insurance is correct, except: a. $1,000 per outdoor sign attached to the building per occurrence b. The Business Personal Property limit will increase by 25% yearly, subject to the average monthly values of the past year c. A loss or damage occurrence is limited to the applicable limit of insurance shown in the Declarations d. The Buildings limit of insurance will automatically increase by 10% each year

d. The Buildings limit of insurance will automatically increase by 10% each year

Which statement is false regarding Section II of the Businessowners Coverage Form? a. Medical expenses include bodily injury to an insured or a person hired to do work b. Medical expenses incurred within 1 year of the accident are covered c. Bodily injury or property damage expected or intended by the insured is excluded d. The definition of insured product does not include vending machines used to distribute the product

a. Medical expenses include bodily injury to an insured or a person hired to do work

In which section of the BOP would coverage for equipment breakdown be found? a. Optional coverages b. Coverage extensions c. Endorsements d. Additional coverages

a. Optional coverages

Section I - Property of the BOP covers which of the following types of property? a. Outdoor furniture b. Land c. Pet animals d. Accounts, bills, and other evidences of debt

a. Outdoor furniture

Which of the following is false about the Businessowners Policy? a. The Supplementary Payments limit is a maximum of $2,500 for all expenses incurred by the insurer b. Medical expenses provide coverage without regard to negligence c. Medical expenses incurred within 1 year of the accident are covered d. A real estate manager is considered an insured

a. The Supplementary Payments limit is a maximum of $2,500 for all expenses incurred by the insurer

The unendorsed Businessowners Policy will pay no more than what amount for the theft of jewelry? a. $7,500 b. $2,500 c. $5,000 d. $3,500

b. $2,500

The Additional Coverage for business income 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. 6 b. 12 c. 18 d. 24

b. 12

Which of the following risks is not eligible for coverage under the Businessowners policy? a. A wholesaler with 25% of the floor space open to the public b. A 10-story office building c. An apartment building of any size d. A construction company with $300,000 total annual payroll

b. A 10-story office building

In which section of the BOP would coverage for outdoor property be found? a. Endorsements b. Coverage extensions c. Additional coverages d. Optional coverages

b. Coverage extensions

Which coverage is not included in a standard Businessowners Policy? a. Automatic 8% increase for Buildings b. Direct Damage from Utility Services c. Business Income and Extra Expense d. Seasonal increase of 25%

b. Direct Damage from Utility Services

Which of the following is not an optional coverage under the BOP? a. Outdoor signs b. Electronic data c. Employee dishonesty d. Money and securities

b. Electronic data

Choose the false statement regarding the Businessowners Policy. a. Pollution clean up and removal are covered as an Additional Coverage b. Manufacturers are eligible for coverage c. Watercraft and associated equipment while afloat are not covered d. Named perils coverage is available by endorsement

b. Manufacturers are eligible for coverage

What is the method of property valuation used under the Businessowners Policy (BOP)? a. Actual Cash Value b. Replacement Cost c. Depreciation d. Stated Value

b. Replacement Cost

Which statement is false regarding the Businessowners Policy? a. Auto dealers, banks and places of amusement are not eligible b. Supplementary Payments include first aid expenses c. Supplementary Payments do not affect the policy limits d. Hired and non-owned autos may be included by endorsement

b. Supplementary Payments include first aid expenses

The resumption of operations condition requires that the insured do which of the following? a. Return to the building within 60 days b. Use damaged property to resume operations c. Replace damaged property on a reimbursement basis d. Submit a proof of loss within 30 days

b. Use damaged property to resume operations

Payroll is covered for how long under Businessowners Business Income coverage? a. 12 months b. 6 months c. Payroll is not covered d. 60 days

d. 60 days

Which of the following is not covered under 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

d. Errors or Omissions

The BOP may be cancelled by which of the following insureds? a. Named insured b. Owner c. Any partner d. First named insured

d. First named insured

Each of the following is a characteristic of an eligible risk for the BOP, except: a. Apartment building b. Building occupies 20,000 square feet of area c. Small business d. Manufacturing occupancy

d. Manufacturing occupancy

Which statement is false regarding the Businessowners Policy? a. Optional coverage for employee dishonesty coverage is available b. Optional coverage for money and securities is available c. A motel of 3 stories in height is eligible d. Most insurance losses are settled on an actual cash value basis

d. Most insurance losses are settled on an actual cash value basis

The Businessowners Coverage Form to the Businessowners Policy provides coverage on which of the following basis? a. Simplified Perils b. Broad Perils c. Modified Perils d. Open Perils

d. Open Perils

Damage to a building insured under the Businessowners Policy is valued on which basis? a. Functional Replacement Cost b. Actual Cash Value c. Agreed Value d. Replacement Cost

d. Replacement Cost

Section III of the Businessowners Coverage Form includes: a. Common Policy Conditions b. Liability related coverages c. Applicable endorsements d. Property related coverages

a. Common Policy Conditions

The Businessowners Coverage Form to the Businessowners Policy provides coverage on which of the following basis? a. Modified Perils b. Open Perils c. Broad Perils d. Simplified Perils

b. Open Perils

All of the following are true about the Limits of Liability under Section II of the BOP, except: a. The Medical Expense limit is a per person limit b. The Products and Completed Operations aggregate limit is equal to the Liability and Medical Expense limit c. The Liability and Medical Expense limit applies per person or organization for personal injury claims d. The Damage to Premises Rented to You limit applies only to premises rented to the insured

b. The Products and Completed Operations aggregate limit is equal to the Liability and Medical Expense limit

The insured may extend up to how much of the insurance for business personal property to property located off-premises? a. $1,000 b. $2,000 c. $7,500 d. $10,000

d. $10,000

All of the following are true of Section II of the Businessowners Coverage Form, except: a. A personal injury loss must be committed in the coverage territory during the policy period b. Employees are considered insureds with respect to their activities as employees c. Bodily injury coverage does not apply to rendering or failure to render professional services d. Property damage liability coverage applies to property that the insured owns, rents and occupies

d. Property damage liability coverage applies to property that the insured owns, rents and occupies

Under a Businessowners Policy medical expenses coverage: a. Pays sums for which the insured is legally liable b. Is written in place of bodily injury c. Prohibits further action for recovery after acceptance of payment d. Provides coverage without regard to negligence

d. Provides coverage without regard to negligence

Under Section II - Liability & Medical Expenses, 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 client of the insured d. A cleaning crew hired by the insured

c. A client of the insured

Each of the following individuals is 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

Section I of the Businessowners Policy does not cover which of the following? a. Permanently installed fixtures b. Permanently installed machinery and equipment c. Computers permanently installed in a motor vehicle subject to registration d. Personal property of customers held for repairs

c. Computers permanently installed in a motor vehicle subject to registration

All of the following are true of a Businessowners Coverage Form, except: a. Section III of the coverage form contains the Common Policy Conditions b. The most the insurer will pay for loss or damage arising out of any occurrence is the limit of insurance shown in the Declarations c. Employee dishonesty is automatically included in each policy d. Land, including land on which the property is located, is not covered

c. Employee dishonesty is automatically included in each policy

All of the following are automatically covered under the Businessowners Policy, except: a. Business personal property b. Personal property of others that is in insured's care c. Mechanical breakdown d. Outdoor fixtures

c. Mechanical breakdown

Which of the following is not an exclusion under Section II of the Businessowners Coverage Form? a. Employers Liability b. Professional Liability c. Medical payments to volunteer workers d. Watercraft Liability

c. Medical payments to volunteer workers

Which covered causes of loss form is used for the BOP? a. Actual Cash Value b. Replacement Cost c. Open perils d. Stated Value

c. Open perils

All of the following are Optional Coverages under the Businessowners Policy, except: a. Outdoor signs b. Employee dishonesty c. Personal property of others that is in the insured's care, custody and control d. Money and securities

c. Personal property of others that is in the insured's care, custody and control

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. 10% c. 15% d. 25%

d. 25%

Within how many days after an insured acquires new business property must the property be added to the BOP policy? a. 60 b. 20 c. 45 d. 30

d. 30