Question 66

The standard deductible under the businessowners policy applies to business personal property.

The standard deductible of $500 under the businessowners policy (BOP) specifically applies to business personal property coverage.

A) Business personal property

This option is correct because the standard deductible of $500 is explicitly stated to apply to business personal property coverage within the BOP. This deductible is deducted from the amount of the loss before the policy pays out.

B) Extra expense

This option is incorrect as the deductible does not apply to extra expense coverage. Extra expense is designed to cover costs incurred to continue operations after a loss and is typically not subject to the same deductible as business personal property.

C) Civil authority

This option is incorrect because the civil authority coverage does not have the $500 deductible applied to it. Civil authority coverage provides protection when access to the insured premises is restricted by civil authorities due to a covered peril, and it generally functions under different terms.

D) Fire department service charge

This option is incorrect as the fire department service charge is typically a separate coverage that does not include the standard deductible of $500 applicable to business personal property. It specifically covers costs incurred for fire department services when a fire occurs.

Conclusion

The correct answer, business personal property, is the only option where the $500 deductible is explicitly applied under the businessowners policy. All other options either relate to different types of coverage or do not have the deductible applied, thereby confirming that option A is the only valid choice in this context.