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Eligibility and General Conditions

Summary: The Insurance Services Office (ISO) businessowners program is a package policy offering property and liability coverage for certain groups of commercial insureds. The program may be used to insure a variety of business enterprises. It is directed towards “main street” commercial insureds who otherwise would find an insurance package comprised of the commercial property form (CP 00 10 06 07 ), commercial general liability form (CGL), equipment breakdown coverage (EB 00 20 08 08 ), and business income (CP 00 30 06 07 ) forms providing unnecessary coverage at an unaffordable price.

The forms have undergone many revisions since they were first introduced. Heretofore, BOP coverage was made up of a general conditions form (BP 00 09 01 97 ), a standard or special property part (BP 00 01 01 97 or BP 00 02 01 97 ), and a businessowners liability part (BP 00 06 01 97 ). The standard property coverage form (BP 00 01 97) provided named perils coverage; the special property coverage form (BP 00 02 01 97) provided special perils coverage. Each form provided both mandatory and optional coverages. Liability coverage was mandatory and was provided by the liability coverage form (BP 00 06 01 97). Mandatory form BP 00 09 01 97 contained the conditions.

Now, however, ISO has revised the businessowners program. Forms BP 00 09 01 97, BP 00 01 01 97, BP 00 02 01 97, and BP 00 06 01 97 were withdrawn in 2002. The contents of these forms are incorporated into form BP 00 03 01 06 and the new revision, BP 00 03 01 10 Form BP 00 03 is written on a special causes of loss basis; the form can be converted to named peril coverage by endorsement. The rules governing eligibility have been revised and new endorsements added in the program.

Following is a discussion of the eligibility requirements and conditions (now Section III of the BP 00 03)

Topics covered: Eligibility—occupancies Ineligible classes of business Businessowners section III policy conditions

Eligibility—Occupancies

Eligibility requirements are contained in the businessowners subdivision of the Insurance Services Office (ISO) Commercial Lines Manual (CLM). Unless otherwise noted, eligible risks cannot exceed 35,000 square feet in total floor area or exceed $6,000,000 in annual gross sales at each location. Incidental storage buildings not exceeding 35,000 square feet and occupied by the insured may be included. Additional qualifications may be set out in state exception pages.

Apartment buildings of any size, including residential condominium associations, are eligible for coverage as well as building owners’ business personal property in eligible apartment buildings. Eligible incidental occupancies are (1) offices; (2) eligible wholesaler, mercantile, service, or processing occupancies, and contractors, which in total do not exceed 35,000 square feet; and (3) contractors that do not occupy more than 7,500 square feet or more than 15 percent of the total area. (Contractors exceeding this limit are classified separately.)

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