THE BUSINESSOWNERS POLICY

Which of the following statements is NOT TRUE regarding the Valuable Papers and Records coverage extension of the Businessowners policy?

The maximum amount that will be paid for the valuable papers and records extension is $5,000 of coverage at each location.

Coverage B of an unendorsed standardized Businessowners policy provides how much coverage for theft of money & securities?

$0. Even though the Businessowners policy provides "open peril" coverage which includes theft, the loss of bullion, money and securities is listed as "property not covered" under Coverage B.

The limit for the Businessowners policy additional coverage for "Money Orders and Counterfeit Money" is:

$1,000.

Under the additional coverages of the standardized Businessowners policy, how much is the limit for "Pollutant Clean-Up and Removal" if caused by a covered loss?

$10,000 in any 12-month period. The policy pays up to $10,000 in each policy year for "Pollutant Clean-Up and Removal".

The insured is covered under a standard Businessowners policy. She has several computers used in the business and the electronic data stored on them becomes corrupted as a result of lightning. The cost to research and restore this data is $20,000. How much will the policy pay for the electronic data?

$10,000. The coverage provides up to an annual aggregate of $10,000. The cost to replace or restore electronic data is covered if the data is corrupted or destroyed by a covered cause of loss.

Which of the following is the additional limit provided by a standard Businessowners policy "Debris Removal" in the event that the policy limit is exhausted in paying the loss?

$25,000. The additional limit is $25,000 when the basic coverage provided by the policy is not enough. The basic coverage provides debris removal coverage up to 25% of the actual amount of the loss up to the policy limit. Sometimes the amount of the loss PLUS the debris cleanup will exhaust the limit and the company will pay up to an additional $25,000 for debris removal.

Hannah must take time away from work to help assist in the investigation of a claim that was made against her BOP policy. The policy will pay for Hannah's actual loss of earnings up to:

$250 per day. The BOP policy will pay for actual loss of earnings, $250 per day, if the insured is asked by the insurance company to take time away from work to assist in the investigation and/or defense of a claim.

How much coverage is provided by the "Accounts Receivable" coverage extension of the Businessowners policy for loss to accounts receivable records off-premises?

$5,000 The "Accounts Receivable" coverage extension of the Businessowners policy provides $10,000 for "on-premises" losses and $5,000 for "off-premises" losses.

If a building insured by a standardized Businessowners policy has been vacant or unoccupied beyond _______ the insurer can send the insured a notice of cancellation.

60 days If the risk has been vacant or unoccupied beyond 60 consecutive days, the insurer can send the insured a notice of cancellation. Buildings that have 65% or more of their rental units or floor area vacant or unoccupied, are considered unoccupied under this provision.

Which of the following contractors would be eligible for a Businessowners policy?

A carpenter doing all of his own work building kitchen cabinets in people's homes and earns $75,000 per year. General contractors and contractors with annual payroll in excess of $300,000 ARE INELIGIBLE for coverage under the BOP. Contractors working above four stories in height are also not eligible. A specialized contractor performing carpentry work who does not have a payroll of more than $300,000 annually would be eligible.

Which of the following types of property would be covered by Coverage B of a standard, unendorsed Businessowners policy?

A copy machine that is leased by the covered business.

Of the following businesses, which one is NOT eligible for coverage under a Businessowners policy?

An auto dealership with $1 million dollars in gross annual sales. Auto dealerships are not eligible for the BOP, no matter the amount of their gross annual sales. The barbershop and hair salon would qualify as "service risks" that meet the requirements and the pizza joint would qualify as a restaurant that also meets the requirements.

Under the BOP Part III - Conditions section, all of the following would be considered unoccupied, EXCEPT:

An office building containing two empty units and these two empty suites represent 25% of the total floor space. A building is considered vacant when 65% or more of the total floor space is not being utilized or rented out. The office building with two empty suites is only 25% vacant.

Section I of the Businessowners policy places limitations on coverage for certain losses if they are not caused by a specified cause of loss. All of the following are specified causes of loss under the policy, EXCEPT:

Building glass breakage. Building glass breakage is not a specified cause of loss as listed by the Businessowners policy. All the other answers: Fire or lightning; Sinkhole collapse; and Water damage are all listed as specified causes of loss.

Coverage B of Section I of the Businessowners policy provides coverage for:

Business personal property.

On a standard BOP policy, all of the following items have a limitation on the coverage amount if the cause of loss is theft, EXCEPT:

Computers Computers are not included in the list of property with a $2,500 limit of liability for theft.

Pete's business is covered by a standard Businessowners policy. He has been accused by a customer of displaying inaccurate pricing on his website. Which of the following statements best describes how this claim would be handled by the BOP?

Coverage for any claim caused by a wrong description of the price of goods, products or services is excluded by the personal and advertising injury coverage of the BOP.

If a covered business is a limited liability company, the standard Businessowners policy provides coverage for all of the following "insureds", EXCEPT:

Executive director. Executive director's are not "insureds" if the business is a limited liability company.

The "Business Income" additional coverage under the standard Businessowners policy includes all of the following in its definition of "ordinary payroll expenses", EXCEPT:

Executive payroll.

The optional coverage for "Money and Securities" under a standard Businessowners policy provides for the loss of money and securities used in the insured's business as a result of all of the following, EXCEPT:

Fraud When someone uses fraud to take money from the insured, it is not covered under the optional coverage for "Money and Securities". Theft, disappearance, and destruction ARE all covered.

The "Employee Dishonesty" optional coverage of the Businessowners policy covers all of the following losses due to the dishonest acts of employees, EXCEPT:

Loss of valuable papers and records.

Under a standardized Businessowners Policy, personal property that is temporarily off the premises while in transit or at another premises not owned by the insured:

May be covered under the personal property "off premises" coverage extension.

All of the following are included in the Businessowners policy coverage territory, EXCEPT:

Mexico.

Which of the following statements regarding the optional coverage of a standardized Businessowners policy is TRUE?

Optional coverages usually require an additional premium.

Which of the following coverages would NOT be included in the liability section of the Businessowners policy?

Professional liability.

Sam has his current business locations covered under a standard Businessowners policy. He purchases a new building to add another business location. Which of the following statements best describes how coverage will apply for Sam's newly acquired property?

Sam will have $250,000 of coverage for 30 days or until he reports his newly acquired property to the insurer, whichever comes first.

The section of the Businessowners policy that contains the requirements for the insurer to cancel the policy is:

Section III. Section III of the Businessowners policy contains the cancellation conditions.

What coverage is provided under the BOP for a steam boiler explosion?

Steam boiler explosions are excluded unless the damage is a result of an explosion of gases or fuels within the object or flues.

Selena would like to select an optional coverage for her standard Businessowners policy to cover a large outdoor business sign, not attached to her building, that she owns. Which of the following statements is CORRECT regarding this optional coverage?

The amount of the optional coverage for outdoor signs is selected by the insured and scheduled on the Businessowners policy.

All of the following statements are TRUE regarding the standard Businessowners policy coverage extension for "Business Personal Property Temporarily in Portable Storage Units", EXCEPT:

The coverage is provided for rented storage units away from the insured premises.

The Medical Expense coverage for a standard Businessowners policy will pay for all of the following, EXCEPT:

The insured when injured while working in their business. The Medical Expense coverage under a standard Businessowners policy does NOT cover any insured.

Under a Businessowners policy, the "Hired and Nonowned Auto Liability" endorsement would cover:

Vehicles borrowed by the insured. This endorsement is used with the BOP when the insured does not carry coverage for liability under a Commercial Auto policy.

Under a standardized Businessowners policy, the liquor liability exclusion applies to insured businesses:

Who are in the business of serving or furnishing liquor. A standardized Businessowners policy's liquor liability exclusion applies to businesses that are in the business of serving or furnishing liquor.

Font Masters Printing Company has a printing press that suffers a covered total loss. The company paid $25,000 ten years ago for the press. Actual cash value is $40,000 and the replacement cost is $55,000. The company has had to cancel several contracts for printing due to the loss of the press and they are anxious to resume full production. Font Masters is covered under a Businessowner's Policy (BOP). How much will the insurer pay for this claim?

$55,000. The Businessowners policy settles property claims on a replacement cost basis. The insurer will pay $55,000 to Font Masters for this claim as that is the replacement cost of the damaged property. The price the insured paid for it 10 years ago as well as the actual cash value of the press are not considered in settling the loss.

Wholesalers can be covered by the BOP if no more than _____ of their total floor area is open to the public.

25%

Convenience stores selling gasoline must have a minimum of ______ square feet in total floor area in order to qualify for the BOP?

3,000 In the newer edition of the BOP, restaurants or convenience stores selling gasoline must have a minimum of 3,000 square feet of total floor space in order to qualify as an acceptable risk.

The BOP has limitations on the square footage in regard to eligible retail and service risks. What is the maximum square footage a building can contain and still be eligible for the policy?

35,000 square feet Eligible retail and service risks cannot exceed 35,000 square feet in total floor area, or exceed $6,000,000 in annual gross sales at each location. Incidental storage buildings not exceeding 35,000 square feet and occupied by the insured may be included.

The "Business Income" additional coverage of the standard Businessowners policy provides coverage for "ordinary payroll coverage" for:

60 days unless the insured selects and schedules a different amount. The insurance company pays for only the loss of business income sustained during the restoration period that takes place within 12 consecutive months after the date of the covered loss or damage. However, it pays for ordinary payroll expenses for only 60 days after the date of loss unless a higher number of days is scheduled on the Declarations page.

Which of the following statements is TRUE regarding how a standardized Businessowners policy additional coverage of "Collapse" becomes payable?

The collapse must be such that the building cannot be used as intended.