Property & Casualty Insurance Exam (National Portion)Property and Casualty Insurance BasicsMedium
A small business owner has a Businessowners Policy (BOP). An employee is injured on the job due to faulty equipment and files a Workers' Compensation claim. Which part of the BOP will respond to this claim?
- AWorkers' Compensation is typically excluded from a BOP
- BBusiness Income and Extra Expense coverage
- CBusiness Property coverage
- DBusiness Liability coverage
Show answer & explanationAnswer & explanation
Correct answer: A. Workers' Compensation is typically excluded from a BOP
Workers' Compensation is a statutory coverage that is almost universally excluded from a standard Businessowners Policy. Employers must secure a separate Workers' Compensation policy to cover employee injuries.
Why the other options are wrong
- B. Business Income covers loss of income due to business interruption, not employee injuries.
- C. Business Property covers physical damage to the business's property.
- D. Business Liability covers third-party bodily injury and property damage, not employee injuries.
BOP Exclusions
Standard Businessowners Policies contain specific exclusions for certain types of risks, such as Workers' Compensation, auto liability, and professional liability, which require separate policies.
- Workers' Compensation is excluded
- Auto liability is excluded
- Professional liability is excluded
- Requires separate policies for excluded risks
Memory trick: BOPs EXCLUDE employee and vehicle woes.