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RMI 4224 Exam 3 Study GuideChapter 15 Business Owners Policy (BOP)Eligibility- Apartment Buildingso Includes residential condominium - Artisan Contractorso Carpentry, construction, or drywall installation- Convenient Storeso With or without fast food restaurants No auto repair, car wash, or propane/kerosene tank filling- Office Buildingso Can’t exceed 6 stories or 100,000 square feet of total floor area- Service/Processing Businesseso Size limitations and also bakeries, Laundromats, print shops- Restaurantso No more than 7,500 square feet of floor spaceo Limitations to seating capacityo Limitations to amounts of alcohol sales1. Limited cooking establishments2. Fast food3. Casual dining4. Fine dining- Self-storage Facilitieso Can’t exceed 2 stories in heighto Industrial materials, chemicals, pollutants and waste are ineligible- Wholesalers o No more than 25% of sales may come from retail operationso No more than 25% of floor space may be open to the publico Distribute: hardware, tools, auto supplies, plumbing supplies, and clothing*Policy Structure- Declarations o Name and mailing address of named insuredo Policy numbero Name and mailing address of the agencyo Designation of the insured’s legal statuso Policy periodo Addresses and location coveredo Limits of insuranceo List of forms and endorsements- Coverage Formo Section I – Propertyo Section II – Liabilityo Section III – Conditions- EndorsementsProperty – Section I- BPP Formo Provide coverage similar to unendorsed BOP- Cause of Loss – Special Formo Provide coverage similar to unendorsed BOP- BI & EE Formo Provide coverage similar to unendorsed BOP- Definitions- Property Coveredo Building Completed additions Fixtures Permanently installed machinery and equipment Personal property in apartments, rooms or common areas furnished by you acting as a landlord Personal property used to maintain the buildingo Business Personal Property Named insured’s personal property in or on the buildings at the described premises or within 100 feet and includes: Owned property used by the named insured in their business Property of others in the named insured’s care, custody, control, but only for the amount they are legally liable plus costof labor and materials or services furnished or arranged on the property of others Tenant’s improvements and betterments Leased personal property  Exterior building glass Business personal property in an undescribed buildingo Property Not Covered Aircrafts, autos, and other vehicles that require registration Money and securities Contraband Land, water, growing crops, or land Watercraft  Accounts, bills, food stamps Computers permanently installed in aircraft, watercraft, or motor truck Electronic data Animals Optional Coverages- Outdoor Signs- Money and Securities- Burglary and Robbery- Employee Dishonesty- Equipment BreakdownAdditional Coverages- Debris removal- Preservation of property- Fire department service charges- Collapse- Water damage- Business income- Extra expense- Pollutant clean up and removal- Civil authority- Money orders/counterfeit money- Forgery and alteration- Increased cost of construction- Business income from dependent properties- Glass expense- Fire extinguisher recharge expense- Electronic data- Interruption of computer operations- Limited coverage – fungi, wet rot, dry rot and bacteriaCoverage Extensions- Newly acquired or constructed property- Personal property off premises- Outdoor policyo Provides coverage for specified perils of fire, lightning, explosion, riot or civilcommotion, aircrafts to fences, antennas, signs, trees, shrubs, and plantso Limit is $2,500 and only $1,000 for one plant, tree, or shrub- Personal effectso Personal property that is portable in nature, such as jewelry or clothingo Up to $2,500 at each described premiseso Doesn’t apply to theft o Doesn’t cover tools and equipment used in insured’s business- Valuable papers and recordso Pays loss of valuable papers and records, including cost to research, replace, or restore lost information or damaged recordso Up to $10,000 at described premises o $5,000 at other locations- Accounts receivable o Loss to accounts receivable recordso Up to $10,000 a year per occurrence at described premiseso $5,000 a year per occurrence at any other locationExclusions - Ordinance or law- Earth movement- Governmental action- Nuclear hazard- Utility services- War and military action- Water- Certain computer-related losses- Fungi, wet rot, or dry rot- Virus or bacteria- Electrical apparatus- Consequential losses- Smoke, vapor, gas- Steam apparatus- Frozen plumbingo Plumbing losses arising out of insured’s neglect- Dishonestyo Coverage should be provided in a commercial crime policyo No coverage for dishonest acts by the named insureds, partners, directors, or representatives- False pretense- Exposed property- Collapse- Pollution- NeglectExclusions (other types of losses)- Errors or omissionso Programming or processing errors- Installation, testing, repairo Losses arising from errors in design, testing, or repair of the computer system- Electrical disturbanceo Loss to electronic media and records caused by an electrical disturbance- Continuous or repeated seepage or leakage of water- Weather conditions- Acts or decisions- Negligent worko Loss from alleged faulty, inadequate, or defective planning, zoning, development, design , workmanship, construction, or improper material use ormaintenance - Loss or damage to productso Product becomes unable to be used and is destroyed because of an error in the production process- Business income and extra expense exclusionso Loss arising from extra expense or increased business income loss to repair or build due to a strike, or the suspension - Accounts receivable exclusionso Alteration, falsification, concealment, or destruction of records of accounts receivable due to wrongful giving or taking of money or securities, or similar propertyo Bookkeeping, accounting, or billing errors or omissionso Loss found only because of an audit of records or inventoryLimits - Outdoor signso $1,000 limit on outdoor signs attached to the building- Automatic increases in building limito Automatic increase of 8% is provided unless different percentage is shown in declarationso Increase is based on the number of days since the beginning of the policy year- Seasonal increase limito 25% increase to business personal propertyo


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FSU RMI 4224 - Exam 3 Study Guide

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