Section 3D Flashcards Preview

Property > Section 3D > Flashcards

Flashcards in Section 3D Deck (41):

BOP is a package policy designed for

Limited cooking or fast food restaurants, convenience stores ,
service or processing type businesses,
small office buildings,
apartment buildings, and
retail stores


BOP is designed for

small businesses


BOP has very competitive

Rates coupled with direct-bill renewal procedures


BOP is similar to

A homeowners policy except it is for small businesses.


Both property and liability coverages

Are included in the BOP


The BOP allows the policyholder great flexibility permitting

Insureds to add additional coverages like crime or boiler and machinery to the package.


Office buildings may not exceed 6 stories or have no more than

100,000 sq ft.


Retail or service businesses may not have more than

25,000 sq ft and/or gross annual sales in excess of $3,000,000


Office condominium associations

Are also eligible as processing-type businesses


On a BOP, ineligible businesses are

Taverns, auto dealers, banks, credit unions,manufacturing companies, and contractors


10 days advance notice is required

If cancellation due to nonpayment will occur.


BOP property coverage form is



A limit of insurance must be

Shown on the declarations for each type of property to be covered.


If named peril endorsement is added, it will cover

Fire, lightning, extended coverage, vandalism, sprinkler leakage, sinkhole collapse, volcanic action, and peril of transportation.


Peril of transportation

Loss to business personal property in transit due to collision, derailment, or sinking of vessels


Theft of business personal property is covered since

All-risk coverage applies to both the building and the contents


To determine what an all-risk policy covers, you must

Look at the policy's exclusions and /or limitations


The BOP property coverage form provides additional extensions of coverage

Such as debris removal


The BOP property coverage form also automatically includes coverage for loss of business income due to

A covered loss and extra expense incurred during a period of restoration.


In the BOP, both loss of business income and extra expenses are indirect coverages that are included

Without any maximum policy limit.

Covered for 12 consecutive months after the date of loss


The BOP will pay up to

$10,000 to extract pollutants.

Fire Dept. Service Charges are covered up to $2,500 in addition to limits.


BOP replaces or restores electronic data up to

Annual aggregate of $10,000.

Also damage caused by fungi, wet or dry rot, or bacteria if resulting from other than fire or lightning is $15,000 and is not in addition to limits.


The BOP is...

All-risk (theft coverage of furs, jewelry, and watches to a maximum of $2,500),

Built-In automatic increase (inflation guard),

Replacement Cost Basis

$500 deductible


BOP excludes money and

Securities unless crime coverage is purchased.


The BOP excludes coverage for

Aircraft, autos, money and securities, and watercraft as well as war, earth movement, nuclear hazard, power failure, and flood.


The maximum deductible applicable to optional coverages purchased under the BOP program (such as...

Crime, fidelity, glass, and outdoor signs) is $500 per occurrence.


Premium discounts may be given if the insured signs a protective safeguards warranty which states that if

The sprinkler or fire alarm systems do not work, fire claims will be denied.


BOP liability has no



BOP liability is $1,000,000 per occurrence for

BI and PD.

This is a commercial policy so personal liability is not covered.


In the BOP, bodily injury and property damage caused by

The operation of mobile equipment is covered.


If the client doesn't have commercial auto, they can add

Hired auto and non-owned auto liability coverage by endorsement on the BOP.


Hired Autos

Include all autos the insured leases, hires, rents, or borrows but not autos owned by employees, partners, or members of their HH.


Non-Owned Autos include

All autos the insured does not own, lease, hire, or borrow which are used in connection with the business, including autos owned by employees, partners or members of their HH.


BOP covers the legal liability of the insured for

BI, PD, personal injury, and advertising injury. Fire legal liability is also covered.


Supplementary payments in the BOP, in addition to limits, are

Cost of bail bonds, attorney fees, loss of earnings up to $250 a day and accrued interest on judgments, are also included.


Declarations show three separate limits of liability:

Combined single limit (CSL),
Medical Payments to Others,
Fire Legal Liability


Combined Single Limit (CSL) for BI and PD and

Medical payments to others on an occurrence basis.

Personal injury and advertising injury liability are also covered here, but only on a per person basis.


Medical Payments to Others

On a person basis


Fire Legal Liability

Applies on a per fire basis


Limits on the dec page are subject to aggregate limits as well. Once the aggregate limit has been exhausted

For one-year policy period, other claims will not be paid until the renewal (when the aggregate limit starts over)


Some insurers limit their exposure on a BOP in the area of

Products and completed operations by setting a special aggregate limit on those coverages that is only half as much (50%) as the aggregate limit that applies to other liability coverages.