Flashcards in Section 3D Deck (41):
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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
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BOP is designed for
small businesses
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BOP has very competitive
Rates coupled with direct-bill renewal procedures
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BOP is similar to
A homeowners policy except it is for small businesses.
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Both property and liability coverages
Are included in the BOP
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The BOP allows the policyholder great flexibility permitting
Insureds to add additional coverages like crime or boiler and machinery to the package.
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Office buildings may not exceed 6 stories or have no more than
100,000 sq ft.
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Retail or service businesses may not have more than
25,000 sq ft and/or gross annual sales in excess of $3,000,000
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Office condominium associations
Are also eligible as processing-type businesses
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On a BOP, ineligible businesses are
Taverns, auto dealers, banks, credit unions,manufacturing companies, and contractors
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10 days advance notice is required
If cancellation due to nonpayment will occur.
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BOP property coverage form is
All-risk
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A limit of insurance must be
Shown on the declarations for each type of property to be covered.
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If named peril endorsement is added, it will cover
Fire, lightning, extended coverage, vandalism, sprinkler leakage, sinkhole collapse, volcanic action, and peril of transportation.
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Peril of transportation
Loss to business personal property in transit due to collision, derailment, or sinking of vessels
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Theft of business personal property is covered since
All-risk coverage applies to both the building and the contents
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To determine what an all-risk policy covers, you must
Look at the policy's exclusions and /or limitations
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The BOP property coverage form provides additional extensions of coverage
Such as debris removal
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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.
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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
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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.
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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.
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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
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BOP excludes money and
Securities unless crime coverage is purchased.
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The BOP excludes coverage for
Aircraft, autos, money and securities, and watercraft as well as war, earth movement, nuclear hazard, power failure, and flood.
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The maximum deductible applicable to optional coverages purchased under the BOP program (such as...
Crime, fidelity, glass, and outdoor signs) is $500 per occurrence.
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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.
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BOP liability has no
Deductible.
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BOP liability is $1,000,000 per occurrence for
BI and PD.
This is a commercial policy so personal liability is not covered.
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In the BOP, bodily injury and property damage caused by
The operation of mobile equipment is covered.
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If the client doesn't have commercial auto, they can add
Hired auto and non-owned auto liability coverage by endorsement on the BOP.
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Hired Autos
Include all autos the insured leases, hires, rents, or borrows but not autos owned by employees, partners, or members of their HH.
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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.
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BOP covers the legal liability of the insured for
BI, PD, personal injury, and advertising injury. Fire legal liability is also covered.
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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.
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Declarations show three separate limits of liability:
Combined single limit (CSL),
Medical Payments to Others,
Fire Legal Liability
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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.
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Medical Payments to Others
On a person basis
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Fire Legal Liability
Applies on a per fire basis
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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)
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