California Adjuster Test Questions and Answers Graded A+
Business Owner Package (BOP) - 2. Max seating of 75 for limited cooking and 150
ANSWERS - bundles property, liability, and for fast food
income protection in a single package. 3. Beer and wine sales no more than 25% annual
Sometimes referred to as homeowner's income
insurance for businesses. 4. No liquor sales
5. Has Maintenance of fire extinguishing
equipment
Is inflation coverage (guard) feature typically
found in a BOP? - ANSWERS - Yes
Self Storage Facilities qualifications for a BOP. -
ANSWERS - 1. Maximum of two stories
What is the value feature in a BOP? - 2. No storage of pollutants, waste, chemicals, or
ANSWERS - Replacement Cost industrial materials.
What are the two basic types of coverage in a What types of businesses are NOT qualified for a
Commercial Package Policy? - BOP? - ANSWERS - 1. Car dealerships,
ANSWERS - Liability and Property service stations, repair shops
coverages 2. Parking lots, garages
3. Amusement parks
4. Bars, nightclubs, and the like
5. Banks and similar institutions
What is a surety bond? - ANSWERS - A
6. Manufacturing and servicing businesses
contract establishing liability including at least 3
(except those specifically eligible)
parties:
7. Condominium associations (except residential
1. The PRINCIPAL who agrees to fulfill an
and office).
obligation, 2. the OBLIGEE to whom the principal
owes the obligation, and 3. the SURETY who
guarantees to pay the obligee if the principal
What is the maximum stories for an office
defaults.
building to be eligible for a BOP? -
ANSWERS - Six stories
Surety - ANSWERS - The party that
becomes legally liable for debt, failure or default
of another party. Major Sections of a BOP? - ANSWERS - 1.
Property
2. Liability
Indemnitor - ANSWERS - Fourth party in a 3. Common Policy Conditions
surety bond who agrees to reimburse the surety
for losses sustained if the principal defaults.
What is the claim form basis used for BOP
liability? - ANSWERS - The occurrence
Limited Cooking and Fast Food Restaurant form is used, covering damages occurring during
the policy term, no matter when the claim is filed.
qualifications for a BOP. - ANSWERS - 1.
7,500 sq. ft. or fewer
1/7
, California Adjuster Test Questions and Answers Graded A+
In a BOP, what is the General Aggregate Limit in Are costs associated with defending and
relation to the per occurrence limit? - investigating a claim against the insured included
ANSWERS - The General Aggregate Limit as Supplementary Payments? -
is twice the per occurrence limit. ANSWERS - Yes.
The Business Owners Policy is ... - What is an anti-concurrent causation (ACC)
ANSWERS - a type of Commercial clause? - ANSWERS - The clause
Package Policy (CPP) for small to medium sized effectively eliminates coverage during
businesses integrating multiple lines of insurance catastrophic situations where everything seems
into one insurance package. to happens at once. In catastrophes such as
earthquakes or hurricanes, a single excluded
cause of loss in the chain of events could lead to
In a BOP policy with protective systems, if the denial of coverage. However, California adheres
system becomes inoperative the insured must to the effective proximate cause doctrine.
notify the insurance company within ... -
ANSWERS - 48 hours, or the coverage will
be suspended and possibly denied. California's effective proximate cause doctrine
says ... - ANSWERS - an insurer must base
its coverage decision on the leading or
Can inflation guard coverage be added to a BOP predominant cause of loss in a situation like a
at no extra cost? - ANSWERS - Yes, so catastrophic loss where many perils occur at
can business income, extra expense, and once. If the predominant cause of loss is
pollution cleanup as additional coverages with no excluded from coverage, then the damage will
extra cost. not be covered, even where a covered peril
contributed to the loss.
What is accounts receivable coverage in a BOP?
- ANSWERS - It provides coverage for the What two forms is the Business Owners Policy
money the insured expects to collect, but cannot available in? - ANSWERS - Special Form
because of damage to accounting records (open peril) and Standard Form (named peril).
caused by a covered peril.
The Standard BOP Form is a named peril policy
A BOP provides loss of income coverage on an that covers ... - ANSWERS - Fire,
actual loss sustained basis for how long? - lightening, Windstorm or Hail, Smoke, Aircraft or
ANSWERS - 12 months Vehicles, Riot, Vandalism, Sprinkler leakage,
Sinkhole, Volcanic action, Transportation
(property covered while being transported).
Can a gas station or convenience store include a
car wash in its BOP? - ANSWERS - No, a
car wash is an excluded operation. What are the four types of Commercial Auto
Insurance? - ANSWERS - 1. Basic
Business Auto Policy (BAP)
2. Garage Policy or Garage-keepers Policy
2/7
Business Owner Package (BOP) - 2. Max seating of 75 for limited cooking and 150
ANSWERS - bundles property, liability, and for fast food
income protection in a single package. 3. Beer and wine sales no more than 25% annual
Sometimes referred to as homeowner's income
insurance for businesses. 4. No liquor sales
5. Has Maintenance of fire extinguishing
equipment
Is inflation coverage (guard) feature typically
found in a BOP? - ANSWERS - Yes
Self Storage Facilities qualifications for a BOP. -
ANSWERS - 1. Maximum of two stories
What is the value feature in a BOP? - 2. No storage of pollutants, waste, chemicals, or
ANSWERS - Replacement Cost industrial materials.
What are the two basic types of coverage in a What types of businesses are NOT qualified for a
Commercial Package Policy? - BOP? - ANSWERS - 1. Car dealerships,
ANSWERS - Liability and Property service stations, repair shops
coverages 2. Parking lots, garages
3. Amusement parks
4. Bars, nightclubs, and the like
5. Banks and similar institutions
What is a surety bond? - ANSWERS - A
6. Manufacturing and servicing businesses
contract establishing liability including at least 3
(except those specifically eligible)
parties:
7. Condominium associations (except residential
1. The PRINCIPAL who agrees to fulfill an
and office).
obligation, 2. the OBLIGEE to whom the principal
owes the obligation, and 3. the SURETY who
guarantees to pay the obligee if the principal
What is the maximum stories for an office
defaults.
building to be eligible for a BOP? -
ANSWERS - Six stories
Surety - ANSWERS - The party that
becomes legally liable for debt, failure or default
of another party. Major Sections of a BOP? - ANSWERS - 1.
Property
2. Liability
Indemnitor - ANSWERS - Fourth party in a 3. Common Policy Conditions
surety bond who agrees to reimburse the surety
for losses sustained if the principal defaults.
What is the claim form basis used for BOP
liability? - ANSWERS - The occurrence
Limited Cooking and Fast Food Restaurant form is used, covering damages occurring during
the policy term, no matter when the claim is filed.
qualifications for a BOP. - ANSWERS - 1.
7,500 sq. ft. or fewer
1/7
, California Adjuster Test Questions and Answers Graded A+
In a BOP, what is the General Aggregate Limit in Are costs associated with defending and
relation to the per occurrence limit? - investigating a claim against the insured included
ANSWERS - The General Aggregate Limit as Supplementary Payments? -
is twice the per occurrence limit. ANSWERS - Yes.
The Business Owners Policy is ... - What is an anti-concurrent causation (ACC)
ANSWERS - a type of Commercial clause? - ANSWERS - The clause
Package Policy (CPP) for small to medium sized effectively eliminates coverage during
businesses integrating multiple lines of insurance catastrophic situations where everything seems
into one insurance package. to happens at once. In catastrophes such as
earthquakes or hurricanes, a single excluded
cause of loss in the chain of events could lead to
In a BOP policy with protective systems, if the denial of coverage. However, California adheres
system becomes inoperative the insured must to the effective proximate cause doctrine.
notify the insurance company within ... -
ANSWERS - 48 hours, or the coverage will
be suspended and possibly denied. California's effective proximate cause doctrine
says ... - ANSWERS - an insurer must base
its coverage decision on the leading or
Can inflation guard coverage be added to a BOP predominant cause of loss in a situation like a
at no extra cost? - ANSWERS - Yes, so catastrophic loss where many perils occur at
can business income, extra expense, and once. If the predominant cause of loss is
pollution cleanup as additional coverages with no excluded from coverage, then the damage will
extra cost. not be covered, even where a covered peril
contributed to the loss.
What is accounts receivable coverage in a BOP?
- ANSWERS - It provides coverage for the What two forms is the Business Owners Policy
money the insured expects to collect, but cannot available in? - ANSWERS - Special Form
because of damage to accounting records (open peril) and Standard Form (named peril).
caused by a covered peril.
The Standard BOP Form is a named peril policy
A BOP provides loss of income coverage on an that covers ... - ANSWERS - Fire,
actual loss sustained basis for how long? - lightening, Windstorm or Hail, Smoke, Aircraft or
ANSWERS - 12 months Vehicles, Riot, Vandalism, Sprinkler leakage,
Sinkhole, Volcanic action, Transportation
(property covered while being transported).
Can a gas station or convenience store include a
car wash in its BOP? - ANSWERS - No, a
car wash is an excluded operation. What are the four types of Commercial Auto
Insurance? - ANSWERS - 1. Basic
Business Auto Policy (BAP)
2. Garage Policy or Garage-keepers Policy
2/7
