BOP Insurance QUESTIONS AND
VERIFIED ANSWERS
All are true about a BOP EXCEPT: - CORRECT ANSWERS-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: - CORRECT
ANSWERS-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: - CORRECT ANSWERS-Answer: It is
named perils
Explanation:
The BOP is all-risk.
All of the following are true regarding medical coverage on a BOP EXCEPT: -
CORRECT ANSWERS-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: - CORRECT ANSWERS-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? - CORRECT
ANSWERS-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: - CORRECT ANSWERS-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.
BOPs are designed for small to medium-sized businesses. Which of the following would
be eligible for a BOP? - CORRECT ANSWERS-Answer: A small retail store
Explanation:
Small to medium-sized retail stores, such as a drug store, are eligible for a BOP. Also
eligible are service type businesses, small office buildings, and small apartment houses.
Auto dealers, banks, credit unions, movie theaters, public schools, large apartment
complexes and manufacturing businesses are not eligible.
Which of the following businesses is not eligible for a BOP? - CORRECT ANSWERS-
Answer: Auto dealer
Explanation:
Only small, low risk businesses are eligible for a BOP. Auto dealers must buy garage
liability instead. Banks, credit unions and manufacturing companies are not eligible
either.
Liability coverage on a BOP is most similar to that found on: - CORRECT ANSWERS-
Answer: CGL
Explanation:
If you understand what the CGL covers then you also understand the liability coverages
on a BOP since they are virtually the same.
VERIFIED ANSWERS
All are true about a BOP EXCEPT: - CORRECT ANSWERS-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: - CORRECT
ANSWERS-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: - CORRECT ANSWERS-Answer: It is
named perils
Explanation:
The BOP is all-risk.
All of the following are true regarding medical coverage on a BOP EXCEPT: -
CORRECT ANSWERS-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: - CORRECT ANSWERS-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? - CORRECT
ANSWERS-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: - CORRECT ANSWERS-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.
BOPs are designed for small to medium-sized businesses. Which of the following would
be eligible for a BOP? - CORRECT ANSWERS-Answer: A small retail store
Explanation:
Small to medium-sized retail stores, such as a drug store, are eligible for a BOP. Also
eligible are service type businesses, small office buildings, and small apartment houses.
Auto dealers, banks, credit unions, movie theaters, public schools, large apartment
complexes and manufacturing businesses are not eligible.
Which of the following businesses is not eligible for a BOP? - CORRECT ANSWERS-
Answer: Auto dealer
Explanation:
Only small, low risk businesses are eligible for a BOP. Auto dealers must buy garage
liability instead. Banks, credit unions and manufacturing companies are not eligible
either.
Liability coverage on a BOP is most similar to that found on: - CORRECT ANSWERS-
Answer: CGL
Explanation:
If you understand what the CGL covers then you also understand the liability coverages
on a BOP since they are virtually the same.
