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Flashcards in The Businessowners Policy (BOP)—Property Provisions Deck (36)
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A BOP’s property coverage can apply to ___, ___ OR ___.

buildings, business personal property, or both


Utility Services Exclusion: This exclusion precludes coverage for loss resulting not only from electrical power failure but also from the failure of other utility services—such as

water, Internet cable, telephone lines, satellite networks, cellular telephones, or other services—from a source away from the premises. Failure includes a reduction in capacity or supply. The exclusion applies whether the failure occurs on or away from the described premises.


The utility services exclusion does not apply to loss or damage to computers and electronic data.

computers and electronic data.However, the electrical apparatus exclusion applies to some service. interruptions.


A detailed “electrical apparatus” exclusion precludes coverage for various types of power surges. If a power surge leads to a fire, the ensuing fire is, however, covered. Another exception to the power surge exclusion provides that loss or damage to computers is covered if it is caused by an occurrence within

100 feet of the described premises that results in a power interruption, power surge, blackout, or brownout


Limitations: •There is no coverage for damage by rain, snow, sleet, ice, sand, or dust to building interiors unless the damage is caused by

thawing of snow or ice on the building or the roof or walls are first damaged by an unexcluded cause.


Limitations: •There is no coverage for loss to steam boilers, pipes, engines, and turbines, and loss to hot water boilers or other water heating equipment, if caused by conditions or events within the equipment. However, coverage does apply if the damage is caused by

an explosion of gases of fuel within the furnace, flues, or passages of a fired vessel.


Limitations: •There is no coverage for property that is missing unless there is evidence to show what happened to it. Disagreement between a physical inventory and a computerized inventory might indicate a record-keeping error; it does not by itself mean that property has been stolen, lost, or destroyed. However, this limitation does not apply to

the money and securities optional coverage


Limitations: A false pretenses or voluntary parting exclusion precludes coverage for property lost because

it has willingly been transferred to a person or place outside the described premises on the basis of unauthorized instructions.


Limitations: Breakage of fragile articles is not covered. However, this limitation does not apply to

camera and scientific instrument lenses, containers of property held for sale, or glass that is part of a building.


Limitations: •Theft coverage on especially susceptible property is limited to $2,500 for furs; jewelry (except for ___ ; or patterns, dies, molds, and forms.

items worth $100 or less per item)


Limitations: Animals are not covered property in the 2010 edition of the BOP unless

they are the insured’s stock (as in a pet store) or owned by others and boarded by the insured (as in a kennel or animal hospital)


Limitations: Even if an animal is covered property, loss or damage to the animal is not covered unless

the animal is killed or its destruction becomes necessary.


Additional Coverages : Pollutant Cleanup and Removal: No coverage applies to costs of tests to assess the existence, concentration, or effects of the pollutants, but ___ is covered.

testing performed in the course of extracting pollutants from land or water


Additional Coverages: Fire department service charges are covered up to $2,500, unless

a higher limit is shown in the declarations


Preservation of Property:
If it is necessary to move covered property to another location to protect it from damage by a covered cause of loss, any loss to that property occurring during the move and for up to ____ at the new location will be covered.

30 days


Additional Coverages : Coverage of $___ is provided for loss due to the insured having accepted counterfeit money or money orders that are not paid on presentation to the issuer.



Additional Coverages: Coverage is provided for loss due to forgery or alteration of any check, draft, promissory note, etc., issued by the insured or the insured's agent or by someone impersonating the insured or the insured's agent. The applicable limit is $___ unless a higher limit is shown in the declarations.



Additional Coverages: Increased Cost of Construction:
Coverage applies to increased costs incurred to comply with ordinances or laws regulating the construction or repair of buildings or establishing zoning or land use requirements. The limit is $ ____ for each damaged building insured on a replacement cost basis.



Additional Coverages: Increased Cost of Construction:
If coverage is needed for demolition or increased cost of construction of undamaged portions of the property, it must be added by endorsement. The costs of complying with ordinances requiring the insured to test for or clean up for ____ is excluded.

pollutants, fungi, wet or dry rot, or bacteria.


Additional Coverages: Coverage of $___ applies to the cost of recharging or replacing discharged fire extinguishing equipment.



Additional Coverages: Fire Extinguishing Systems Recharge Expense: If the discharge is accidental, this limit also applies to loss or damage to covered property from the accidental discharge. No coverage applies to loss from discharge during ___ or ___.

installation or testing.


Additional Coverages: In case of covered damage from water, other liquids, powder, or molten material, the cost to ___ __ and ___ part of the building in order to repair the system from which the substance escaped is covered.

tear out and replace


Additional Coverage: Coverage applies to the cost of replacing or restoring electronic data that has been destroyed or corrupted by a covered cause of loss, including from a computer virus. An annual aggregate limit of $___ applies, unless a higher limit is shown in the declarations.



Additional Coverage: The exclusions section of the businessowners form contains an exclusion of collapse except to the extent that coverage is provided in the form's collapse additional coverage. The additional coverage then covers abrupt collapse when

it is caused by one of the policy’s specified perils.


Temporary coverage of up to $250,000 per building applies to buildings under construction at the described premises and newly acquired buildings at other locations. Similarly, temporary coverage of up to $100,000 per building applies to business personal property at newly acquired premises and at newly constructed or acquired buildings at insured locations, and to newly acquired personal property at scheduled insured buildings. Coverage under this extension expires 30 days after ___ /___ , ___ OR ___, —whichever occurs first.

- acquisition or start of construction of the portion of the building that qualifies as covered property,
- when values are reported
- or when the policy expires


A $2,500 limit is available to cover outdoor property, consisting of trees, shrubs, plants, detached signs, fences, and antennas. A sublimit applies to individual trees, shrubs, and plants. Covered perils for this extension are limited to (6), _____. Conspicuous by their absence are perils such as vandalism and windstorm, to which outdoor property can be especially susceptible.

fire, lightning, explosion, riot and civil commotion, and aircraft,


Personal effects of the insured, the insured's employees, and the insured's partners and managers are covered, for up to $2,500 at each location. However, no coverage applies to loss by ___ and the extension does not apply to __ and __ used in the insured's business.

A) Theft
B) tools and equipment


Coverage is also provided for loss to valuable papers and records, including the cost to ___ and ___ information contained in valuable papers and records damaged by a covered cause of loss.

research and restore


An exclusion specifically precludes accounts receivable coverage for loss due to ___ or ___, as well as loss caused by bookkeeping errors. The exclusion also precludes coverage for any claimed accounts receivable loss based solely on an audit or inventory computation.

falsification of records or other wrongdoing


The ISO BOP form establishes two deductibles: one that is shown in the declarations as the "Deductible" and another that is shown in the declarations as the "Optional Coverage Deductible." The "Deductible" might be referred to as the overall property coverage deductible. The "Optional Coverage Deductible" applies only to these optional coverages:

•money and securities
•employee dishonesty
•outdoor signs
•in the 2010 edition, forgery or alteration