Final Adjuster Test (California)
Questions with Complete Solutions
Rated A+.
Business Owner Package (BOP) - Answer bundles property, liability, and income protection in
a single package. Sometimes referred to as homeowner's insurance for businesses.
Is inflation coverage (guard) feature typically found in a BOP? - Answer Yes
What is the value feature in a BOP? - Answer Replacement Cost
What are the two basic types of coverage in a Commercial Package Policy? - Answer Liability
and Property coverages
What is a surety bond? - Answer A contract establishing liability including at least 3 parties:
1. The PRINCIPAL who agrees to fulfill an obligation, 2. the OBLIGEE to whom the principal owes
the obligation, and 3. the SURETY who guarantees to pay the obligee if the principal defaults.
Surety - Answer The party that becomes legally liable for debt, failure or default of another
party.
Indemnitor - Answer Fourth party in a surety bond who agrees to reimburse the surety for
losses sustained if the principal defaults.
Limited Cooking and Fast Food Restaurant qualifications for a BOP. - Answer 1. 7,500 sq. ft.
or fewer
2. Max seating of 75 for limited cooking and 150 for fast food
3. Beer and wine sales no more than 25% annual income
4. No liquor sales
5. Has Maintenance of fire extinguishing equipment
Self Storage Facilities qualifications for a BOP. - Answer 1. Maximum of two stories
2. No storage of pollutants, waste, chemicals, or industrial materials.
What types of businesses are NOT qualified for a BOP? - Answer 1. Car dealerships, service
stations, repair shops
2. Parking lots, garages
, 3. Amusement parks
4. Bars, nightclubs, and the like
5. Banks and similar institutions
6. Manufacturing and servicing businesses (except those specifically eligible)
7. Condominium associations (except residential and office).
What is the maximum stories for an office building to be eligible for a BOP? - Answer Six
stories
Major Sections of a BOP? - Answer 1. Property
2. Liability
3. Common Policy Conditions
What is the claim form basis used for BOP liability? - Answer The occurrence form is used,
covering damages occurring during the policy term, no matter when the claim is filed.
In a BOP, what is the General Aggregate Limit in relation to the per occurrence limit? - Answer
The General Aggregate Limit is twice the per occurrence limit.
The Business Owners Policy is ... - Answer a type of Commercial Package Policy (CPP) for
small to medium sized businesses integrating multiple lines of insurance into one insurance
package.
In a BOP policy with protective systems, if the system becomes inoperative the insured must
notify the insurance company within ... - Answer 48 hours, or the coverage will be
suspended and possibly denied.
Can inflation guard coverage be added to a BOP at no extra cost? - Answer Yes, so can
business income, extra expense, and pollution cleanup as additional coverages with no extra
cost.
What is accounts receivable coverage in a BOP? - Answer It provides coverage for the money
the insured expects to collect, but cannot because of damage to accounting records caused by a
covered peril.
A BOP provides loss of income coverage on an actual loss sustained basis for how long? -
Answer 12 months
Questions with Complete Solutions
Rated A+.
Business Owner Package (BOP) - Answer bundles property, liability, and income protection in
a single package. Sometimes referred to as homeowner's insurance for businesses.
Is inflation coverage (guard) feature typically found in a BOP? - Answer Yes
What is the value feature in a BOP? - Answer Replacement Cost
What are the two basic types of coverage in a Commercial Package Policy? - Answer Liability
and Property coverages
What is a surety bond? - Answer A contract establishing liability including at least 3 parties:
1. The PRINCIPAL who agrees to fulfill an obligation, 2. the OBLIGEE to whom the principal owes
the obligation, and 3. the SURETY who guarantees to pay the obligee if the principal defaults.
Surety - Answer The party that becomes legally liable for debt, failure or default of another
party.
Indemnitor - Answer Fourth party in a surety bond who agrees to reimburse the surety for
losses sustained if the principal defaults.
Limited Cooking and Fast Food Restaurant qualifications for a BOP. - Answer 1. 7,500 sq. ft.
or fewer
2. Max seating of 75 for limited cooking and 150 for fast food
3. Beer and wine sales no more than 25% annual income
4. No liquor sales
5. Has Maintenance of fire extinguishing equipment
Self Storage Facilities qualifications for a BOP. - Answer 1. Maximum of two stories
2. No storage of pollutants, waste, chemicals, or industrial materials.
What types of businesses are NOT qualified for a BOP? - Answer 1. Car dealerships, service
stations, repair shops
2. Parking lots, garages
, 3. Amusement parks
4. Bars, nightclubs, and the like
5. Banks and similar institutions
6. Manufacturing and servicing businesses (except those specifically eligible)
7. Condominium associations (except residential and office).
What is the maximum stories for an office building to be eligible for a BOP? - Answer Six
stories
Major Sections of a BOP? - Answer 1. Property
2. Liability
3. Common Policy Conditions
What is the claim form basis used for BOP liability? - Answer The occurrence form is used,
covering damages occurring during the policy term, no matter when the claim is filed.
In a BOP, what is the General Aggregate Limit in relation to the per occurrence limit? - Answer
The General Aggregate Limit is twice the per occurrence limit.
The Business Owners Policy is ... - Answer a type of Commercial Package Policy (CPP) for
small to medium sized businesses integrating multiple lines of insurance into one insurance
package.
In a BOP policy with protective systems, if the system becomes inoperative the insured must
notify the insurance company within ... - Answer 48 hours, or the coverage will be
suspended and possibly denied.
Can inflation guard coverage be added to a BOP at no extra cost? - Answer Yes, so can
business income, extra expense, and pollution cleanup as additional coverages with no extra
cost.
What is accounts receivable coverage in a BOP? - Answer It provides coverage for the money
the insured expects to collect, but cannot because of damage to accounting records caused by a
covered peril.
A BOP provides loss of income coverage on an actual loss sustained basis for how long? -
Answer 12 months
