Schriefer Exam 3 questions and answers
(already passed)
Which of the following statements concerning the businessowners policy (BOP) is correct?
A. Manufacturing businesses are generally eligible for coverage
B. It is most commonly used to insure large businesses
C. The BOP is designed to provide property and liability coverage for small or less complex
businesses
D. Eligibility rules are based on an applicant's loss history. - correct answer ✔✔C. The BOP is
designed to provide property and liability coverage for small or less complex businesses
Purpose of BOP:
-designed to provide property & liability coverage for small or less complex businesses.
-coverages in BOP are VERY similar to the B&PP, Business Income & Extra Expense and CGL.
Per the ISO eligibility rules, which of the following types of buildings would be eligible for
coverage under a businessowners policy (BOP)?
A. A 30,000 square foot insurance agency.
B. A six-story, 120,000 square foot office building
C.A seven-story 75,000 square foot office building.
D. A 200,000 square foot bakery with annual sales in excess of $6,000,000. - correct answer
✔✔A. A 30,000 square foot insurance agency.
Eligibility:
may not exceed 35,000 sq ft or $6M in annual sales
,All of the following types of businesses are ineligible for the ISO BOP due to the severity of risk
and/or special coverage situations EXCEPT:
A. Auto repairers
B. Funeral homes.
C. Bars, pubs and cocktail lounges.
D. Financial institutions. - correct answer ✔✔B. Funeral Homes
Ineligible:
Auto Businesses
Bars
Financial Institutions
General Contractors
Buildings occupied by manufacturers
Which of the following statements is/are correct?
I. The BOP provides coverage for all buildings and structures located at the premises described
in the Declarations; that is, only the premises must be described for any building located at the
described premises to be covered.
II. The B&PP Coverage Form only provides coverage for buildings or structures specifically
described in the Declarations.
A. I only.
B. II only.
C. Both I & II.
D. Neither I nor II. - correct answer ✔✔C. Both I & II.
, *unlike commercial coverage forms the BOP only needs the premises on which the structures
are to be describes, this provides an advantage to the insured but can cause Insurance-to-value
challenges*
Which of the following statements is/are correct?
I. The Named Perils Endorsement (BP 10 09) to the Businessowners Coverage Form provides the
same causes of loss coverage as the Causes of Loss - Basic Form, plus limited off-premises
transit coverage.
II. This named perils coverage form is frequently used by businesses because it provides broad
coverage at an economical price.
A. I only.
B. II only.
C. Both I & II.
D. Neither I nor II. - correct answer ✔✔A. I only.
not frequently used because it is expensive
The business income and extra expense coverage under a BOP is typically subject to which one
of the following limitations?
A. Specific dollar limit.
B. Coinsurance.
C. Monthly limit of indemnity.
D. 12 consecutive months limitation. - correct answer ✔✔D. 12 consecutive months limitation.
No Co-insurance requirement
(already passed)
Which of the following statements concerning the businessowners policy (BOP) is correct?
A. Manufacturing businesses are generally eligible for coverage
B. It is most commonly used to insure large businesses
C. The BOP is designed to provide property and liability coverage for small or less complex
businesses
D. Eligibility rules are based on an applicant's loss history. - correct answer ✔✔C. The BOP is
designed to provide property and liability coverage for small or less complex businesses
Purpose of BOP:
-designed to provide property & liability coverage for small or less complex businesses.
-coverages in BOP are VERY similar to the B&PP, Business Income & Extra Expense and CGL.
Per the ISO eligibility rules, which of the following types of buildings would be eligible for
coverage under a businessowners policy (BOP)?
A. A 30,000 square foot insurance agency.
B. A six-story, 120,000 square foot office building
C.A seven-story 75,000 square foot office building.
D. A 200,000 square foot bakery with annual sales in excess of $6,000,000. - correct answer
✔✔A. A 30,000 square foot insurance agency.
Eligibility:
may not exceed 35,000 sq ft or $6M in annual sales
,All of the following types of businesses are ineligible for the ISO BOP due to the severity of risk
and/or special coverage situations EXCEPT:
A. Auto repairers
B. Funeral homes.
C. Bars, pubs and cocktail lounges.
D. Financial institutions. - correct answer ✔✔B. Funeral Homes
Ineligible:
Auto Businesses
Bars
Financial Institutions
General Contractors
Buildings occupied by manufacturers
Which of the following statements is/are correct?
I. The BOP provides coverage for all buildings and structures located at the premises described
in the Declarations; that is, only the premises must be described for any building located at the
described premises to be covered.
II. The B&PP Coverage Form only provides coverage for buildings or structures specifically
described in the Declarations.
A. I only.
B. II only.
C. Both I & II.
D. Neither I nor II. - correct answer ✔✔C. Both I & II.
, *unlike commercial coverage forms the BOP only needs the premises on which the structures
are to be describes, this provides an advantage to the insured but can cause Insurance-to-value
challenges*
Which of the following statements is/are correct?
I. The Named Perils Endorsement (BP 10 09) to the Businessowners Coverage Form provides the
same causes of loss coverage as the Causes of Loss - Basic Form, plus limited off-premises
transit coverage.
II. This named perils coverage form is frequently used by businesses because it provides broad
coverage at an economical price.
A. I only.
B. II only.
C. Both I & II.
D. Neither I nor II. - correct answer ✔✔A. I only.
not frequently used because it is expensive
The business income and extra expense coverage under a BOP is typically subject to which one
of the following limitations?
A. Specific dollar limit.
B. Coinsurance.
C. Monthly limit of indemnity.
D. 12 consecutive months limitation. - correct answer ✔✔D. 12 consecutive months limitation.
No Co-insurance requirement
