Difficulty: Medium

Average Score: 63%

Which is FALSE concerning a Businessowners Policy?

Rationale

Insured property can be covered anywhere in the world.

A Businessowners Policy (BOP) primarily provides coverage for insured property located at a specific premises, typically within the United States, and may have limitations on worldwide coverage. The statement regarding global coverage is therefore false, as BOPs are designed to protect businesses primarily within their local operational area.

A (The standard deductible is $500 but can be raised to $2500) YOUR ANSWER

This statement is true, as many Businessowners Policies set a standard deductible of $500, which can indeed be increased to $2500 at the policyholder's discretion. The ability to adjust the deductible allows businesses to manage their premium costs while also influencing their out-of-pocket expenses in the event of a claim.

C (Property is covered on an Open Perils basis) YOUR ANSWER

This statement accurately reflects the coverage provided by most Businessowners Policies, which typically cover property on an Open Perils basis. This means that all risks are covered except for those specifically excluded in the policy, providing broad protection for the insured property.

D (Completed additions to the business building are covered) YOUR ANSWER

This statement is true, as Businessowners Policies generally extend coverage to completed additions to the business building. Coverage for completed renovations or expansions is typically included, as long as they conform to the terms set forth in the policy.

Conclusion

In summary, while options A, C, and D accurately describe aspects of a Businessowners Policy, option B is incorrect due to the policy's geographical limitations on coverage. Understanding the specific coverage parameters of a BOP is essential for business owners to ensure adequate protection for their assets.

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