California Property & Casualty Broker-AgentProperty InsuranceEasy
A small business owner has a Businessowners Policy (BOP) that includes coverage for property. A pipe bursts in their office, causing water damage to the office furniture and computer equipment. Which of the following perils would typically cover this type of loss under a standard BOP?
- ASudden and Accidental Discharge of Water
- BVolcanic Eruption
- CEarthquake
- DFlood
Show answer & explanationAnswer & explanation
Correct answer: A. Sudden and Accidental Discharge of Water
A standard Businessowners Policy (BOP) covers 'sudden and accidental discharge of water or steam from a plumbing, heating, air conditioning, or automatic fire protective sprinkler system.' A bursting pipe falls under this peril.
Why the other options are wrong
- B. Volcanic Eruption is usually covered, but not the cause of this loss.
- C. Earthquake is typically excluded and requires a separate endorsement.
- D. Flood is typically excluded and requires a separate flood insurance policy.
BOP Covered Perils (Water Damage)
Standard Businessowners Policies (BOPs) typically cover property damage resulting from the sudden and accidental discharge or overflow of water or steam from plumbing, heating, air conditioning, or sprinkler systems.
- Sudden and accidental is key.
- Applies to internal systems.
- Excludes damage from continuous leaks, flood, or sewer backup.
Memory trick: BOP covers 'Sudden Internal Water' but not 'External Natural Water'.