BOP Exam
A producer has a client who has experienced a covered building loss of $10,000. Up to what amount will the policy pay for debris removal on this loss, exclusive of any deductible that may apply?
$2,500******** $5,000 $7,500 $10,000
What is the limit on the coverage for forgery and alteration in the businessonwers policy?
$1,000 $2,000 $2,500************ $5,000
A producer has a Businessowners client that has experienced a $135,000 business personal property loss. The client's coverage limit on business personal property is $100,000, but the loss occurred during the client's busiest season. Assuming all conditions for full payment of the seasonal adjustment in the business personal property limit have been met, what amount of this loss is covered?
$50,000 $100,000 $125,000******* $135,000
All of the following losses would be covered by a Businessowners policy EXCEPT
An insured's building is damaged by exposure to excess moisture for over a year A windstorm brought down a tree next to the insured's building which made a hole in the roof The exterior walls of the insured's building were defaced during a civil disturbance*********** Though nothing actually caught fire, smoke from smoldering carpet rendered office furniture unusable
Which of the following buildings would typically be eligible for a Businessowners policy?
An two-story office building***** A tavern that derives most of its income from liquor and has a security detail at night An office building seven stories in height A 90,000 square-foot building out of which a retail clothing store is operated
From the insured's standpoint, which of the following may result from purchasing a BOP policy as compared to purchasing multiple coverages through two or more monoline policies?
Less chance of gaps in coverage Higher overall premium costs Less understanding by the insured of the coverages provided More chance of paying for overlapping coverages
Which of the following types of policies may include a retroactive date?
Neither an occurrence policy no a claims-made policy An occurrence policy A claims-made policy******* Both an occurrence policy and claims-made policy
From an insurer's standpoint, which of the following is characteristic of writing BOP policies instead of commercial package or moonlike policies?
No ability to customize the BOP to fit various types of businesses, for example, flower shops******* Greater efficiency by including multiple coverages in one policy Less consumer satisfaction Less need to monitor eligibility
Pollutant Cleanup
$0
An insured under a Businessowners policy accepts a check for $4,000 which turns out to have been forged and therefore will not be honored by the bank. How much will the policy pay for this loss?
$0 $1,000 $2,500******** $4,000
Personal effects valued at $3,000 are lost due to a covered peril from an insured's business premises. What amount of this loss is covered by the insured's Businessowners policy?
$0 $1,000 $2,500********** $3,000
Acting in collusion, two employees of a business covered by a BOP embezzle $24,000 from the insured. The insured has the employee dishonesty optional coverage with a limit of $20,000. What amount will the policy pay for this loss?
$0 $12,000 $20,000****** $24,000
The front edge of a business premises covered by a Businessowners policy is flooded and as as result, a fence is washed away. it will cost $750 to replace the fence. What amount will the policy pay for this loss?
$0********* $500 $750 $1,250
Which of the following restaurants would generally NOT be eligible for a Businessowners policy?
A 3,200 square-foot cafeteria A pizza shop specializing in take-out and delivery A table service restaurant for up to 80 patrons****** A fast-food restaurant
Which of the following insureds would be covered under a Businessowners policy for liability arising from damages sustained by another party due to serving liquor?
A bar A winery A beer distributor An art gallery hosting a cocktail reception*********
Upon the occurrence of which of the following events would the insured under a Businessowners policy be required to notify the police?
A burglary****** Collapse caused by a sinkhole Breakage of exterior glass by a downed tree limb A lightning strike
An extended reporting period (ERP) is available under which type of policy?
A claims-made policy
Which of the following types of policies is made available under the Commercial General Liability coverage program?
A claims-made policy Both an occurrence policy and a claims-made policy***** Neither an occurrence policy nor a claims-made policy An occurrence policy
Which of the following could be a feature of unimproved land?
An abandoned shed A condemned barn Water********** Residence under construction
An insured has added the Liquor Liability endorsement to her Businessowners policy. Which of the following losses would her policy cover?
An individual became ill after drinking a defectively packaged bottle of the insured's wine The incident that led to the insured's liability while her liquor license was suspended The insured's liability loss was also covered under another policy The insured's employee misjudged the intoxication level of a patron, who was later involved in a bar fight. This employee had all the requisite training.************
Which of the following contractors would typically be able to purchase Businessowners coverage?
An individual who installs steam boilers A swimming pool installer A general contractor A plumbing service and repair company******
The consideration clause is the part of the policy in which
Basic information, such as the policy number, name of the insurance company, names of the insureds, and the insured business address, is stated. Coverage extensions such as pollutant cleanup and removal are defined The insurance company agrees to provide coverage in return for premium payments by the insured********F The method of property valuation is detailed
An insured under a Businessowners policy publishes material, in an advertisement that infringes on someone else's copyright. Under what coverage would liability for this event be covered?
Bodily injury Professional liability Personal and advertising injury********* Property damage
Which if the following would typically be covered under the business personal property coverage rather than the building coverage?
Completed room additions********* Fire sprinkler system Furnace Office furniture located on the insured location
An insured's Businessowners policy becomes effective on June 1, 2021. The policy period for this policy will end on
December 1, 2012 June 1, 2024 June 1, 2022********* The policy is perpetual and never expires
An insured pays the premium based on estimated sales. The policy period ended December 30,2014. Until what date does the insurer have the right to examine the insured books and records?
December 30, 2015 September 15, 2016 December 30, 2016 December 30, 2017*******
When the BOP is excess, the insured must
Defend against any loss Defend if the other insured declines to do so Loses its right of recovery against the other insurer****** Cannot join in a suit by the insured against the other carrier
After a loss, an insured under a Businessowners policy intends to leave the damaged property to the insurer. Which of the following policy conditions prohibits the insured from doing this?
Duties of the insured in the event of a loss Abandonment******* Loss payment Transfer of the insured's rights and duties under the policy
Limitations for payment for damage to interior glass does not include
Glass blocks******* Mirrors Insulating panes Solar panels
The types of actions for which accountants may be held responsible include all of the following EXCEPT
Incorrect financial status reports Misappropriation of funds by employees Errors in judgement that cause no harm***** Failure to file proper tax returns on time
A computer installed in a truck that an insured uses exclusively in his business to make deliveries is damaged in a collision. What coverage for this loss is provided by the insured's Businessowners policy?
It is covered as business personal property***** It is covered under the automobile coverage extension It is not covered It is covered under the policy's building coverage
Which of the following would be a covered medical expense under a Businessowners policy?
LASIK surgery Cosmetic dental surgery Weight loss surgery Prosthetics needed after a covered incident*****
"The failure to provide the degree of knowledge, care or the skill that the average professional peer, in good standing, under similar circumstances would provide" is the definition of
Liability Inadequate rendition Proximate cause Negligence*********
An insured under a BOP policy has failed to pay the premium, and November 1, the insurer serves notice that it is cancelling the policy for that reason. What is the earliest dat that cancellation of the coverage can be made effective?
November 4 November 8 November 11****** November 15
To expand its operations, a business insured by a Businessowners policy purchased an additional business location on November 1. Unless the new premises is reported to the insurer sooner, on what date will coverage under the newly constructed or acquired property coverage extension end?
November 8 November 15 December 1******* December 31
An insured under a Businessowners policy had a loss on October 10, 2019. The policy period ended November 25, 2019. On what date does the insured's right to bring legal action against the insurer expire?
October 10, 2020******** November 25, 2020 October 10, 2021 November 25, 2021
What type of policy serves a similar role in the personal insurance market that the BOP serves in the commercial insurance market?
Personal umbrella policy Homeowners policy********** Watercraft policy Personal auto policy
To ensure building owners are properly maintaining precautions to prevent losses, underwriter may want to review
Police reports for buildings in the surrounding 3 blocks Maintenance procedures and records******** Any fires in the surrounding 3 blocks The building's history
Business personal property is defined as
The contents of insured buildings
All of the following statements about the coverage provided by a Businessowners policy for medical payments are true EXCEPT
The policy covers only injuries for which the insured is at fault******** Covered expenses include the cost of a funeral if the injury results in death Medical expenses are covered without regard to liability Only injuries that arise from accidents that occur during the policy period are covered
Six months after an insured buys a BOP, the insurer adopts a revised policy form that provides broader coverage with no additional premium charge. Which of the following statements is true?
Upon the insureds request, the insurer will issue the insured a new policy with the broadened coverage at no charge The insured can have the broadened coverage applied to his existing policy by paying an additional charge The broadened coverage will only be available to the insured at policy renewal The broadened coverage will automatically apply to the insured's current policy*********
Which of the following is NOT an endorsement under a Businessowners policy?
Wind/hail deductible Employee benefits liability Earthquake Bodily injury liability*********
Most an insurer will pay
aggregate limits
How many days does an insured have to report the cost of debris removal after a covered property is damaged?
30 days 45 days 90 days 180 days*****
Extended business income
60 days
"To assume all expenses incident to the defense of any claim and to fully compensate an indemnity for all loss or expense, undiminished by the costs of defending a claim or litigation" is the definition of
A hold harmless agreement Vicarious liability Reverse waiver Professional liability coverage*******
Which of the following would not be covered under a Businessowners property policy?
Accounts, bills, food stamps, or other debt evidence***** Property of others in the insured's custody or control Leased personal property the insured is contractually obligated to insure Exterior building glass
An insured under a Businessowners policy suffers a loss. Which of the following is NOT one of the duties the insured must perform?
Arrange for their own independent claims adjuster to review the damaged property********* Keep records of expense incurred to preserve and protect property Resume business operations as soon as practicable Promptly notify the insurer of the loss
An insured under a Businessowners policy who operates a small restaurant is concerned about losing perishable food stock in the event of a power outage. What endorsement could the insured's producer recommend?
Protective Safeguards endorsement Mechanical Breakdown optional coverage Spoilage Coverage endorsement ********* Removal of Utility Outage Exclusion endorsement
business personal property rather that building coverage
restroom fixtures
An insured under a Businessowners policy had a fire that destroyed some of its accounts receivable records. The insured incurred $1,000 of expenses to restore most of its accounts receivable records. The records that could not be restored caused the business to lose an additional $3,000 for accounts receivable that could not be collected. Under the accounts receivable coverage extension, how much of this loss will be covered?
$0 $1,000 $3,000 $4,000*******
Due to poor business conditions, a furniture retailer insured by a Businessowners policy has since June 1 been using only 25% of the space in the building he owns. He hopes business will pick up soon, so he doesn't rent out the unutilized area. These circumstances remain the same until August 2, when a fire completely destroys the building. The insured's BOP has a $100,000 limit of insurance on building coverage. How much will the insurer pay for this loss?
$0 $25,000 $85,000 $100,000******
An insured business has a per occurrence limit of $250,000 under the building coverage of its BOP. Two months before the policy expires, the insured incurs a loss of $200,000 to its building as a result of a windstorm. Just one day before the policy expires, a sinkhole causes a loss of $100,000 to the repaired building. What is the total amount the policy could pay under the building coverage for these two losses?
$100,000 $200,000 $250,000********** $300,000
An insured under a Businessowners policy is a tenant that leases it business premises. However, the business premises lack enough business personal property to conduct normal business operations. For this reason, the insurer will treat the business premises as if they were
A fire hazard Subject to audit Vacant ************ Excluded from coverage
For which of the following events would an insured's Businessowners policy pay the individual's medical expenses?
An employee is injured during a baseball game at the company picnic A customer breaks a heel on her shoe on the walkway up to the insured's store, falls and sprains her wrist****** A partner in the insured business is severely lacerated when he walks through a glass door A roofing contractor is injured in a fall
An agent should recommend the Liquor Liability endorsement to insureds under a Businessowners policy who
Are not in the alcoholic beverage business but serve alcoholic beverages to employees at company functions Are not in the alcoholic beverage business, and do not furnish alcoholic beverages, but hold
An insured who runs a small tavern wants to purchase a Businessowners policy. What endorsement should the producer recommend the insured add to her policy to avoid an exclusion in the policy related to alcohol?
Liquor Liability********** Alcoholic Beverage Product Liability Tavern Owners Professional Liability Employment Practices Liability
The business income additional coverage in a BOP is made up of what two components?
Net sales and employee payroll Gross sales and ongoing operating expenses Net income and ongoing operating expenses********* Gross revenue and total payroll
An insured under a Businessowners policy is giving a customer a tour of her facilities when the customer slips and falls on his back. The customer insists that he's fine and refuses any first aid. The customer appears to the insured to be unhurt. What does the Businessowners policy require the insured to do?
Notify the police Keep a record the pertinent details so the customer can report the incident to their health insurer. Nothing******** Notify the insurer
A sculptor buys clay exclusively from a local supplier that recently had a warehouse fire and is currently unable to deliver clay. What coverage under a Businessowners policy will provide coverage for loss of business income due to this interruption in the supply chain?
Preservation of Property Removal of Debris Extra Expense********* Business Income from Dependent Properties
What is the name of the coverage in a Businessowners policy that will cover damage caused by an peril when covered property is moved to another location in order to protect it from a covered cause of loss?
Preservation of property******* Debris removal Property at a newly acquired location coverage Collapse
Businessowners policy coverage to restore electronic data applies to all of the following EXCEPT
Programming code stored on internal servers Prepackaged software bought by the insured****** Customer information on CDs Hard drives that store inventory analytics
Which of the following would NOT be covered under the directors and officers liability coverage?
Reimbursement for expensed fines and penalties when not allowed by statute******* Wrongful acts while directors and officers are acting in an official capacity Neglect and breach of duty Misstatements made by the directors and officers
A stack of boxes containing merchandise falls over in the insured's warehouse and injures a contractor hired by the insured business, a warehouse employee, and a customer. Which of these individuals medical expenses will be covered under the medical expense coverage of the insured's Businessowners policy?
The contractor, the customer, and the employee
Which of the following statements is true regarding the coverage the coverage of lawsuits under the liability coverage provides by a Businessowners policy?
The insurer may refuse to settle the lawsuit out of court The insured's approval is required for any out-of-court settlement agreement The insured's costs of defending a lawsuit deplete the policy's limit of insurance The insurer is not required to defend the insured against covered liability lawsuits
