Chapter 13 Business owners Coverage Form
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 construction company with $300,000 total annual payroll C A 10-story office building D An apartment building of any size
10 story office building Office buildings that are occupied primarily for office purposes that do not exceed 6 stories in height or 100,000 square feet in total floor area are eligible for the BOP.
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 25% D 15%
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.
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? 3 7 5 1
3
The BOP covers property while it is being temporarily stored in another location for how many days? 10 30 15 60
30
Within how many days after an insured acquires new business property must the property be added to the BOP policy? A 60 B 30 C 20 D 45
30
Payroll is covered for how long under Businessowners Business Income coverage? A 60 days B 6 months C 12 months D Payroll is not covered
60 days Payroll losses are only paid for 60 days, while the loss sustained will be covered for 12 months.
The BOP policy provides the same liability coverage as which of the following policies? A Commercial Inland Marine B Business & Personal Property C Commercial Auto D Commercial General Liability
CGL 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.
Section III of the Businessowners Coverage Form includes: A Liability related coverages B Common Policy Conditions C Applicable endorsements D Property related coverages
Common Policy Conditions
In which section of the BOP would coverage for outdoor property be found? A Coverage extensions B Optional coverages C Additional coverages D Endorsements
Coverage extensions Coverage extensions add to the policy limits for certain types of property including newly acquired property, personal property off premises, outdoor property, personal effects, valuable papers and records, and accounts receivable.
The Earthquake endorsement to the BOP provides that coverage continues for how long after a policy expires? A 36 hours B 168 hours C 24 hours D 48 hours
Earthquake coverage continues for up to 168 hours after the policy expiration if an earthquake or volcanic eruption began before the policy expired.
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
Electronic data is an additional coverage, not an optional coverage.
All of the following are true of a Businessowners Coverage Form, except: A Employee dishonesty is automatically included in each policy B Land, including land on which the property is located, is not covered C Section III of the coverage form contains the Common Policy Conditions D The most the insurer will pay for loss or damage arising out of any occurrence is the limit of insurance shown in the Declarations
Employee Dishonesty is not automatic. It is an option that must be selected.
Which of the following is an eligible risk under the BOP? A Fast food restaurant B Small amusement park C Auto repair shop D Manufacturer
Fast food restaurant
Which statement is false regarding the Businessowners Policy? A Hired and non-owned autos may be included by endorsement B Supplementary Payments do not affect the policy limits C Auto dealers, banks and places of amusement are not eligible D Supplementary Payments include first aid expenses
First aid expenses are covered under Medical Expenses, not Supplementary Payments.
All of the following are automatically covered under the Businessowners Policy, except: A Personal property of others that is in insured's care B Mechanical breakdown C Business personal property D Outdoor fixtures
Mechanical breakdown
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 Bodily injury or property damage expected or intended by the insured is excluded C Medical expenses incurred within 1 year of the accident are covered D The definition of insured product does not include vending machines used to distribute the product
Medical expenses include bodily injury to an insured or a person hired to do work WORKERS COMP
Which statement is false regarding the Businessowners Policy? A Optional coverage for money and securities is available B Optional coverage for employee dishonesty coverage is available C Most insurance losses are settled on an actual cash value basis D A motel of 3 stories in height is eligible
Most insurance losses are settled on an actual cash value basis settled on R/C basis
The Businessowners Coverage Form to the Businessowners Policy provides coverage on which of the following basis? A Modified Perils B Broad Perils C Open Perils D Simplified Perils
Open Perils
In which section of the BOP would coverage for equipment breakdown be found? A Optional coverages B Additional coverages C Endorsements D Coverage extensions
Optional coverages
All of the following are Optional Coverages under the Businessowners Policy, except: A Outdoor signs B Personal property of others that is in the insured's care, custody and control C Money and securities D Employee dishonesty
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 not an optional coverage.
All of the following are true of Section II of the Businessowners Coverage Form, except: A Employees are considered insureds with respect to their activities as employees B Property damage liability coverage applies to property that the insured owns, rents and occupies C A personal injury loss must be committed in the coverage territory during the policy period D Bodily injury coverage does not apply to rendering or failure to render professional services
Property damage liability coverage applies to property that the insured owns, rents and occupies Property damage liability does not apply to any property the insured owns, rents, or occupies. Property damage liability is third party coverage, not first party.
Under a Businessowners Policy medical expenses coverage: A Prohibits further action for recovery after acceptance of payment B Is written in place of bodily injury C Provides coverage without regard to negligence D Pays sums for which the insured is legally liable
Provides coverage without regard to negligence medical payments are no fault
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
The Products and Completed Operations aggregate limit is equal to the Liability and Medical Expense limit 2 times the limit
Which of the following is false about the Businessowners Policy? A Medical expenses provide coverage without regard to negligence B Medical expenses incurred within 1 year of the accident are covered C The Supplementary Payments limit is a maximum of $2,500 for all expenses incurred by the insurer D A real estate manager is considered an insured
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.
Which coverage is not included in a standard Businessowners Policy? A Seasonal increase of 25% B Direct Damage from Utility Services C Business Income and Extra Expense D Automatic 8% increase for Buildings
The Utility Services Direct Damage coverage must be added by endorsement.
Which of the following is not an exclusion under Section II of the Businessowners Coverage Form? A Employers Liability B Professional Liability C Watercraft Liability D Medical payments to volunteer workers
The policy does not exclude medical payments to a volunteer worker, only to a paid employee. Medical payments to volunteer workers
The 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
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.
The resumption of operations condition requires that the insured do which of the following? A Use damaged property to resume operations B Return to the building within 60 days C Replace damaged property on a reimbursement basis D Submit a proof of loss within 30 days
Use damaged property to resume operations If the insured declines to use property to resume operations after a covered business income loss, the policy will reduce the amount of the business income loss payment for the resumption of operations that should have been made.
Section I of the Businessowners Policy does not cover which of the following? A Personal property of customers held for repairs B Permanently installed machinery and equipment C Permanently installed fixtures D Computers permanently installed in a motor vehicle subject to registration
Computers permanently installed (or to be installed) in any aircraft, watercraft, or other motor vehicle subject to registration, except when held as stock are not covered.
