Georgia Property & Casualty Practice Exam

On what basis does the property section of a business owners policy (BOP) provide coverage?

1. Listed perils

2. Named perils

3. Specified perils

4. Open perils

The correct answer is: Open perils

The property section of a Business Owners Policy (BOP) provides coverage on an open perils basis. This means that the policy covers all types of risks unless specifically excluded within the policy terms. It provides broad protection for the insured's property against a wide range of potential dangers, streamlining the claims process as the policyholder does not need to prove that a specific peril caused the loss. This open perils coverage is designed to offer business owners peace of mind, knowing that their property is protected against unforeseen or unexpected events that could lead to significant financial loss. Specific exclusions are typically outlined in the policy, making it important for policyholders to review these to understand what is not covered, such as certain types of natural disasters or acts of war. In contrast, other coverage types such as listed, named, or specified perils would only cover risks that are specifically described in the policy. This could limit the protection significantly compared to the broad applicability offered by the open perils approach.