BOP Insurance EXAM 2022/2023 WITH 100% CORRECT ANSWERS

All are true about a BOP EXCEPT: Answer: 100% coinsurance is required True: Vandalism is not covered after 60 days vacancy,Liability coverage is excess over any other insurance that applies,Advance notice must be sent on cancellation or non-renewal Explanation: The BOP does contain replacement cost coverage, but with an 80% coinsurance requirement. The policy contains an automatic inflation guard feature, so coinsurance penalties are rare. On a BOP, hired and non-owned auto coverage applies when: Answer: An employee damages property of others while operating a non-owned car Explanation: Although the liability section of a BOP (which is a CGL) does not provide auto liability for owned autos, the insured may be concerned about liability that may result when an employee drives a non-owned or hired car on company business. To solve this problem, they can add an endorsement known as hired and non-owned auto coverage. All are true about an unendorsed BOP EXCEPT: Answer: It is named perils Explanation: The BOP is all-risk. All of the following are true regarding medical coverage on a BOP EXCEPT: Answer: It covers injury to the named insured and employees Explanation: Like an HO, medical coverage on the liability section of a BOP is to others, not to the insured or to employees, who are required to be covered under workers' compensation. The standard deductible on a BOP is: Answer: $500 Explanation: Although the standard deductible on a BOP is $500, insureds may choose deductibles of either $250, $1,000 or $2,500. The higher the deductible, the lower the premium. Which of the following small businesses would be eligible for a BOP? Answer: A retail store Explanation: A retail store, like a small drug store, would be eligible for a BOP. Remember, the BOP is a package policy for small business, combining commercial property coverages and the CGL. However, only certain types of businesses are eligible: service and processing, mercantile (retail), small office buildings, small apartment houses, limited cooking or fast food restaurants and convenience stores with gas pumps. The liability section of a BOP covers: Answer: Contractual liability Explanation: The liability section of a BOP is a CGL. A CGL covers premises and operations liability, products and completed operations liability, contractual liability, the insured's liability resulting from the acts of independent contractors, personal injury liability and medical payments to others. Personal, auto and aviation liability are excluded on a CGL.