Question

B.O.P. insured had average values of personal property last year amounting to $100,000. Personal property coverage limit on current B.O.P. is $100,000. $115,000 loss occurs due to a covered peril. B.O.P. pays what amount disregarding any deductible?

a. $100,000
b. $115,000
c. $80,000 ($100,000 x 80%)
d. $92,000 ($115,00 x 80%)

Answer 1

The B.O.P. will pay $100,000 (option a) in the event of the $115,000 loss, as it is the maximum coverage limit on the policy, and deductibles are being disregarded in this scenario.

Step-by-step explanation:

If a B.O.P. (Business Owners Policy) insured had average values of personal property last year amounting to $100,000 and the personal property coverage limit on the current B.O.P. is also $100,000, then in the event of a loss, the policy will only pay up to the coverage limit. Therefore, if a $115,000 loss occurs due to a covered peril, the B.O.P. will pay out the maximum coverage amount, which is $100,000.



This is because insurance policies pay up to the limit of the policy, and any loss above that limit is the responsibility of the insured. Deductibles are generally subtracted from the payment from the insurance company, but since we are disregarding any deductible in this case, the B.O.P. would pay $100,000.