Commerical package policy containing property and liability coverages designed to meet insurance needs needs of small & medium sized businesses.

-Offers replacement cost valuation & opern perils protection on covered property

1.) Apartment buildings

2.) Office Buildings

3.) Other Buildings

Eligible wholesale Risk

(Ch. 15 pg 3 see whole list)

-auto parts/distributors

heating/AC equipment distributors

-baked goods wholesalers (no baking onsite)

-hobby,model maker or artists supplies

-Barber/beauty shop supplie distributors

-household appliance distrubtors

-bookbinding & printers' suuplies wholesalers

-floor covering distributors

-plumbing supplies & fixtures

-fruit/veg distributors

Eligible Processing & Service Businesses

(Ch 15 pg 4 for full list)

-Commerical or household appliances & accessories

-bakeries w/ baking onsite

-photocopy services

-barber shops

-photoengraving

-beauty parlors & hair style salons

-photographers

-dental labs

-printing/engraving

-shoe repair shops

-funeral homes

**Businesses w/ more than 25% of sales from off-premises operations NOT ELIGIBLE**

1.) No more than 7,500 sq feet or floor area

2.) seating capacity of 75 or less

3.) Sales of beer or wine may represent of NO more than 25%, liquor can't be sold

4.) Catering service can't exceed 10% of total sales

5.) Seasonal risks closed for more than 30 consecutive days NOT ELIGIBLE

6.) Fast food resturants may have seating capacity of 150 & must have fire extinguishing equipment

-Cafes     - Drugstores    -Cafeteria style buffet

-Hotdog/Hamburger stands     -Coffee Shops    

-Ice Cream Shops   -concession stands       

-Ethnic Restaurants    -Sandwhich Shops

-Pizza shops     -doughnut Shops    -Salad Bars

-Drive ins   - Take out only restaurants

**Certain food/gas stores eligible. Gas Sales can't account for more than 50% of total sales. Can't include resturants, auto service/repair, car wash, tank filling operations

-Motels not exceeding 3 stories are insured.

-No floor restriction.

-Motels w/ eligible operations are eligible.

-Seasonal operations (closed for more than 30 days) NOT eligible

- Motels w/ bars or cocktail lounges NOT elibile

Ineligibility Factors for contractors

(Cj 15 pg 6 for full list)

-annual payroll of $300,000

-heavy construction (buildings, cranes, pipeline)

-manufacture/sale of products under contractors name

-annual sales over $3million

-repairing/painting ships

-lawn chemical spraying

-work at heights of 3 stories

-tree service/removal

-hazardouse material

-waterproofing

-demolition, blasting, wrecking, high pressure boiler

Eligible contractors BOP

Contractors working in the following trades eligible for BOP if none of the ineligible factors apply

(Ch 15 pg 7 full list)

-appliances/accessories

-carpentry

-carpet & furniture

-concrete construction

-decorative/artistic metal erection

-driveway,parking area, sidewalk paving

-electrical work inside buildings

-fencing

-floor installation

-furniture fixtures

-glass & gazing

Ineligible Risk for BOP

Following risks NOT covered under BOP

(Ch 15 pg 7 full list)

-auto repair/service stations

-household personal property

-auto,motor home, mobile home, motorcyle dealers

-insureds whose bus. operations invovle 1 or more locations that are used for manufacturing, processing, or serviceing

-banks, building& loan assocations, credit unions, stockbrokers

-1 or 2 family dwellings

-bars & night clubs

parking lots/garages

Eligible Personal Property for BOP

Following business personal property eligible for coverage under BOP:

1.) Building owners' personal property in eligible apartment buildings

2.) Business personal property in offices that DON'T occupy more than 25,000 sq feet in any 1 building

3.) Business personal property of mercantile, wholesaler, service, or processing operations that DON'T exceed 25,000 sq feet & $3million in annual gross sales at any insured location

4.) Condo unit owners' business property in units that are used for eligible wholesaler, mercantile, service, processing, or office

1.) Open Peril coverage- policy pays for all types of direct damage unless a specific exclusion applies.

-Burden of proof is on the insurer to prove exclusion applies

-Building & personal property coverages are on open peril unless insured purchases named peril endorsement

Major BOP Exclusions

(Ch 15 pg 9-10 for full list)

1.) Enforcement of law or ordiance

2.) Power failure

3.) War & military action

4.) Dishonest or criminal acts by insured

5.) Repeated seepage or leakage of H2O that occurs over period of 14 days ore more

6.) wear & tear, deterioration, rust, mold, decay,

7.) settling, shrinking, cracking, bulging, expansion of sidewalkes, pools, pavements, foundations, walls, floors

8.) Explosion of steam boilers, steam pipes, steam turbines

9.) Rain, snow, sleet

BusinessnessOwners coverage: Property Coverage A

Coverage A: Building- covers replacement cost of building (unless insurace chooses ACV) at the premises described in declarations for which a limit of liability is shown including

a.) completed additions & additions under construction

b.) all permantely installed fixtures, machinery, equipment

c.) personal property of insured used to maintain building

d.) outdoor fixtures

e.) landlord furnishing

**insured must set limits at minimum of 80% of propertys true replacement cost**

1.) aircraft, autos, other registered motor veh.

2.) Bullion, money, securities

3.) contraband or illegal trade

4.) exterior sings

5.)Land, water, group crops, or lawns

6.) outdoor fences, radio, tv antennas

7.) trees, shrubs, plants

8.) boats while afloat

9.)accounts, bills, food stamps, valuable papers & records

10.) computers which are permanatly intalled in aircraft, autos, other registered motor veh.

11.) electronic Data

1.) Debris Removal

2.) Preservation of Property

3.) Fire department service charge

4.) Business Income-Extra Expense

5.) Pollution clean up & removal

6.) Civial Authority

7.) Business perosnal property limit-seasonal increase

8.) Limited Coverage for Fungi, wet rot, dry rot, bacteria

9.) Collapse

10.) fire extinguisher systems recharge expsne

11.) Eletronic data

12.) Business income from dependent properties

13.) money orders & counterfeit currency

14.) forgery or alteration

15.) inceased cost of construction

Additional coverage under BOP:

1.) Fire department service charge

2.) Pollution clean up and removal

1.) coverage states after a 72 hr waiting period

2.) provides up to $10,000 coverage for costs to extract pollutants from land and water at the insrued premises as a result of a covered direct loss. Must be reported in writing within 180 days

Additional coverage under BOP:

1.)Civil authority

2.) Business perosnal property limit-seasonal increase

1.) pays loss of income insured sustain due to actions of civil authories . coverage begins 72 hrs after action and avaible for 3 weeks

2.) limit of insurance for business personal property will automatically increase 25% to provide seasonal variations

Additional coverage under BOP:

1.) Collapse

2.) Fire Extinguiser system recharge expense

3.) Electronic Data

1.) applies to loss resulting in abrupt falling down or caving in of structure or part of structure.

2.) pays up to $5,000

3.) pays up to $10,000 as a result of a covered cause of loss

Additional coverage under BOP:

1.) Business income from dependent properties

2.) Money orders & counterfeit currency

3.) forgery or alteration

1.) pays up to $5,000 due to a direct loss to a dependent property that causes a business income loss to the insured

2.) pays up to $1,000

3.) pays up to $2,500

Extensions of Coverage

These are in addition to other covered property

1.) Newly acquired or constructual buildings

2.) newly acquired business personal property

3.) Personal property off premises

4.) Outdoor Property

5.) Personal Effects

6.) Valuable papers & records

7.) Accounts receivable coverage

Extensions of Coverage:

1.) Newly Acquired or constructed Buildings

2.) Newly acquired business personal property

3.) Personal property off premises

1.) 30 days of coverage subject to limitations

2.) 30 days of coverage subject to limitations

3.) provides up to $10,000 coverage for business personal property anywhere in the coverage territory in transit or at premises not owned, leased, or operated by the insured

Extensions of Coverage:

1.) Outdoor Property

2.) Personal Effects

3.) Valuable papers & records

1.) covers outdoor fences, radio, tv antennas, signs, trees, shrubs, plants. most policy will pay under this extensions in $2,500 but not more than $500 for any tree

2.) covers personal effects of the insured and employees. doesn't cover loss or damage. limit=$2,500

3.) provides $10,000 in coverage to replace valuable papers & records as a result of a covered direct loss

-Common policy conditions: apply to entire policy

-2 sets of conditions for property coverage: property general conditions and property loss conditions

-Liability conditions: liability & medical expense general conditions

-Section III addresses cancellations, changes, concealment, misrepresentation, fraud, examination of records

1.) Abandonment- no abandonment of any property by any party to the insurer

2.) Appraisal Clause- disgned to settle disputes as to value of the damge. Each party hires an appraiers and appraiers select an umpire who settles it

3.) Duties in the event of loss or damage- take resonable steps to prevent further damage, cooperate w/ insurer, comply w/ policy provisions, report claim, contact police

4.) Legal Action Against insurer: action must be brought within 2 yrs after date of loss

5.) loss payment: insurer has 30 days to decide which method the proof of loss has been received. insured must carry 80% of value

6.) Recovered Property: can be retained by insured after an adjustment is made

7.) Vacany clause: if premise has been vacant for 60 consecutive days prior to loss certain perils are suspended or limited. ex: vandalism, sprinkler leakage, glass breakage, water damage, theft, attempted theft.

Payment loss caused by all other perils reduced by 15%

Property Loss Conditions continued

8.) Control of Property: any act of neglect of any other person other than the insured beyond their direction of control will not afect this insurance

9.) mortgageholders: subject to provision of standard mortgagee clause. must be notified of cancellation or non-renwal of policy

10.) No benefit to bailee: coverage is for benefit of insured and not to bailee (one who has custody of insured property)

11.) policy period: inception date and expiration date of policy

12.) Coverage Territory: US, puerto rico, canada

-standard deductible is $500

-base deductible applies to all building & business perosnal property coverages

-NO deductible for fire department, extra expense, business income, civil authority, fire extinguisher system

-Covers the insured's liability for BI, PD, advertising, and personal injury

-Liability amounts of $300,000, $500,000, and $1million

-2 separate sets of aggregate limits; 1 limit applies to products & completed operations and the other to BI and PD . Amounts are twice the per occurence & medical payment limits

1.) Cancellation by Insured- first named insured shown in the declarations may cancel this policy by mailing or delivering to the insurer advanced written notice of cancellation

2.) Cancellation by Insurer- insurer may cancl by mail to the insured a written notice. Can canel if building vacant for 60 or more days. Buildings w/ 65% of more of the rental units or floor area vacant or unoccupied are considered under this provision

3.) Changes to policy must be made in writing by insurer

4.) Concealment, misrepresentation, fraud- policy void if any of these happen

1.) Exam of books & records- insurer can examine & audit insureds books during policy and up to 3 yrs afterwards

2.) Inspections & Surveys- insurer has right to make inspections & surveys

3.) insurance under 2 or more coverages- if 2 or more policy's coverage apply to same loss/damage insurer will not pay more than actual amount of loss

1.) Liberalization Clause- if insurer adopts any revision that would broaden coverage under policy w/o additional premium within 45 days prior to policy period, broaden coverage will immediately apply

2.) Other insurance-insurer will only pay for amount of covered loss or damage in excess of amount due from other insurance

3.) Premium Notices- these are sent to the first named insured at their last known address and responsible for payment of all premiums

1.) Premium Audit- some of the coverages under the policy may be subject to premium adjustment based on an audit of the insureds books & records

2.) Transfer of Rights of recovery against others to the insurer- sometimes called subrogation clause.

3.) Assignment & transfer of your rights & duties under this policy- rights under this policy may not be transferred to someoen else w/o written consent of the insurer

1.) Outdoor signs- specific limit can be provided for outdoor signs

2.) Money & Securities- covers theft, any stealing, dispperance or destruction

3.) Employee Dishonest- covers loss due tot he dishonest acts of employees

4.) Mechanical breakdown- covers certain equipment breakdowns

5.) Hired & Non-owned auto liability endorsement- provides either or both non-owned or hired auto coverage for the named insured

1.) Earthquake Endorsement: covers damages caused by earthquake

2.) Utility Services-Direct Damage: covers loss or damage to property caused by an interruption in water, communcation or power supple service

3.) Utility Services- Time element coverage: same as above but covers loss of business income & extra expense that occurs due to an interruption in utility service

1.) Protective Safeguards: requires insrd. to maintain protective devices. These devices are:

-P1 Automatic Sprinkler system

-P2 Automatic Fire Alarm System

-P3 Security Serivce: sercurity service w/ guard that makes hourly rounds of premise while busienss is closed

-P4 Service Contract: privately owned fire department that provides fire protection service to premise

-P9: any other protective system described in the endorsement

**insurer won't pay for fire damage losses if insured failed to keep protective safeguards**