Question 66

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

The standard deductible of $500 under a businessowners policy specifically applies to the coverage of business personal property, indicating that this amount must be paid out-of-pocket by the insured before the insurance coverage kicks in for losses related to this type of property.

A) Business personal property

This option is correct as the standard deductible of $500 under the businessowners policy applies directly to business personal property coverage. This means that any claims made for damages or losses to business personal property will first require the insured to cover the initial $500 of the claim.

B) Extra expense

This option is incorrect because the standard deductible does not apply to extra expense coverage. Extra expense coverage is designed to reimburse the insured for additional costs incurred to continue operations during a period of disruption, and those claims would not be subject to the standard deductible.

C) Civil authority

This option is incorrect as the civil authority coverage is related to losses incurred due to government actions that prohibit access to the insured premises. Claims under this coverage do not require the standard deductible to be paid first.

D) Fire department service charge

This option is also incorrect since the fire department service charge is typically a separate charge incurred during a fire response, and such charges are not subject to the standard deductible under the businessowners policy.

Conclusion

The correct answer, business personal property, is directly tied to the $500 deductible under the businessowners policy, making it the only applicable coverage among the options provided. Other options like extra expense, civil authority, and fire department service charge do not fall under this deductible provision, further confirming that A is the only correct choice.