Question

All of the following statements are true of the Named Peril Endorsement in a BOP, EXCEPT:

Option 1: It provides coverage only for perils specifically named in the endorsement
Option 2: It is broader than an open perils policy
Option 3: It is a type of property insurance
Option 4: It excludes coverage for all perils not listed in the endorsement

Answer 1

The Named Peril Endorsement in a BOP is limited to covering only the perils that are named in the policy and excludes all others, unlike an open perils policy which covers a broader range of risks.

Step-by-step explanation:

The Named Peril Endorsement in a Business Owners Policy (BOP) has a specific set of covered perils. The true statements regarding this endorsement are:

• It provides coverage only for perils specifically named in the endorsement.
• It is a type of property insurance.
• It excludes coverage for all perils not listed in the endorsement.

However, the statement that the Named Peril Endorsement is broader than an open perils policy is false. An open perils policy, also known as an all-risk policy, typically provides coverage for a wider range of risks, except for those explicitly excluded. In contrast, a named peril policy is more limited and covers only the perils that are specifically stated in the policy.