ELIGIBILITY, POLICY  ORGANIZATION

1. Eligible Occupancies

The eligibility rules for the BOP are more stringent than those for the CPP, which can be used to cover almost any commercial risk. Specific rules of eligibility that deal with the size of buildings and the specific type of business involved determine what risks are eligible to be covered under a businessowners policy. 

The ideal BOP prospect is the small, well managed, one-location business with easily predicted coverage needs.

Only certain types of businesses are eligible under current ISO rules. 

They include certain wholesale, processing and service, restaurant, convenience store, and contracting risks. Eligible businesses are listed in the classification table of ISO’s businessowners policy rules.

Unless otherwise noted, eligible risks may not exceed 25,000 square feet in total floor area or $3 million in annual gross sales at each location.

2. Ineligible Risks

Some classes of risks and certain property are specifically not eligible for the businessowners policy:

Ineligible Risk Categories

■Auto repair or service stations, unless incidental to another otherwise eligible class

■Auto, motor home, mobile home, and motorcycle dealers, unless incidental to anotherotherwise eligible class

■Banks, building and loan associations; savings and loan associations; credit unions; stockbrokers; and similar financial institutions

■Bars and pubs

■Buildings occupied wholly or partially for manufacturing

■Condominium associations other than office or residential condominiums

■Household personal property

Insureds whose business operations involve one or more locations that are used for manufacturing

■One- or two-family dwellings, unless they are garden apartments where multiple units are grouped within a single area and are under common ownership, management and control

■Parking lots or garages, unless incidental to an otherwise eligible class

■Places of amusement

3. Organization

The businessowners policy includes the required property and liability coverages and policy conditions in one form, with certain required information about the insured in a separate declarations.

The policy declarations will show the policy number, name of insurer, name of producer, name and address of the named insured, and the policy period. 

Spaces are provided for a description of the business, the form of business, locations of described premises, and name and address of any mortgage holder. Limits of insurance will be shown for buildings and for business personal property. 

Any optional coverages the insured has selected will be indicated on the declarations, along with the limit of insurance for those coverages.