BOP Questions

[insagent2006]

I have done mostly p an c insurance in the past and I am considering very seriously writing some BOP policies and several questions have come up. Sorry if some of these questions seem trivial to some but since I am not familiar with it.

How many typical locations are on a BOP policy?

Can a BOP policy have a different Business class per location or would they all have to be the same class? (all Offices or all Retail Stores, etc.)

Different coverages on each location allowed?
For example Liquor Liability on one of the locations for a Restaurant

Thanks in advance for your help!

[InsAgentSF]

I will take a guess:

How many typical locations are on a BOP policy? - I think you can list all of the business' locations under a blanket if they do they same type of operations

Can a BOP policy have a different Business class per location or would they all have to be the same class? (all Offices or all Retail Stores, etc.) -Different exposures must be underwritten diferently.

For example Liquor Liability on one of the locations for a Restaurant-
I think coverage extends to business, regardless of location i.e ABC company owns 3 restaurants: Loc 1 doesn't sell Alcohol, Loc 2 & Loc 3 does. You buy Liquor Liability and it will cover ALL locations...

My 5 cents

[pita3333]

Confused by statement "...done mostly P an C..."

A BOP is a Property & Casualty policy ... which is what P and C means!

I know some think it means Personal and Commercial....but if a person thought that....a BOP is still Commercial!

I am seriously scared where our industry is headed....

[Mainemiss]

pita3333 has a point. The answers to the original questions should have been provided by an agency supervisor, principal or experienced agent.

If the person seeking these answers is the highest level of knowledge available...

[mica.cooper]

I am guessing that by P&C they mean Personal Lines Auto/Home/Health/Life. A lot of agents write only these coverages and never write commercial. In a small agency, BOP can represent a big unknown if you never did it or had someone to help you get started. (And most training materials in my experience are lacking)

It sounds like they are just trying to get answer some questions before going further. These are pretty good questions but I don't see any definitive answers from the group. Just one person that tried to help, and the others judging.

[LadyBroker]

A BOP used to mean a Business Owners policy...I always think of it for one small business, with maybe one or two locations. It sounds to me like the original question posed is looking at a risk scenario where maybe it's a strip shopping center, with multiple tenants. The question would be: who's interest are you insuring?? The owner of the building or the owner of the business. For instance, in a strip center, you would have several businesses, each individually owned, all renting from one landlord. The businesses separately must buy coverage for their General Liability, work comp and property exposures(their personal property within the walls of their unit). Liquor is purchased by the owner of the business establishment with the liquor license. The owner of the structure would also have his own insurance, covering the common areas for GL, and insuring the building for All Risk and Catastrophe coverages (if he so desired).

We would be more helpful in answering your questions if perhaps you could be a little more specific about the risk itself. I have always found most posters on this forum to be helpful.

Good luck.

[insagent2006]

Property & Casualty (Auto, Home, Life, Health). i.e. P an C

Yes it is a Small Business Owners Policy I was asking about. Insuring Interest would be the owner of the Business.

So if I wrote a BOP policy for an Accounting Business which would fall into the Office Category and had several locations, different building attributes (Construction, Yr. Built, etc.) and could also have different Building and Property Limits as well as Employee Dishonesty, Accounts Receivable, Valuable Papers and a few other coverages on each of the locations different limits that would be a valid BOP Policy?

Thanks for your help.

[Porter]

insagent2006,

When you have u/w questions call the u/w for the company you are thinking of placing it with. Different companies have different rules so I would go straight to theu/w.

Good Luck!

Porter

[doyourhomework]

BOPs are notoriously different. Don't think that they are a panacea as they are not at all standardized.

If you are not sufficiently schooled in P&C you should be thoroughly reviewing each of the BOP forms that interest you and discussing them with carrier representatives.

One thing to note. A few years ago when the market began to harden some agents began to stick difficult accounts into BOPs which were cheaper but not at all appropriate. For instance, we saw a Mexico based manufacturer of balloons for children removed from an A+ surplus lines market to a BOP because of pricing. Hartford cancelled it six months later and the risk returned to the surplus lines market with a different retail agent and at a significantly higher price than previously.

Between then and now BOPs have been relatively quiet. Now however, presumably because some agents have heard of price softening, we are seeing accounts move into the BOP markets for lower pricing. Again, those placements of which we are aware are largely inappropriate.

Most BOPs have one thing in common, in that, they are location based. One location or many, they are not geared for businesses that have employees spending time off premises....for sales, canvassing, etc.

Don't feed client expectations of greatly reduced renewal pricing and then feel compelled to sell them a BOP to live up to those expectations.

My suggestion for any agent who is intent on writing BOPs is that you have a good relationship with your E&O carrier and at least a 5MM limit.

[InsuranceLady]

Insagent 2006:

One minor correction, if I may:

P & C = Property and Casualty (ie: Fire and Liability-Home, Auto, Bus. & WComp)

L & D = Life & Disability (ie: Health, life & disability)

Two seperate license types.

[mica.cooper]

Can anyone provide an example of a company or situation where more than one class is rated on a BOP?

Also, what about locations? Should all locations have the same class or can they be different.

Someone mentioned Surplus, what would differentiate a BOP from a Surplus?

We do not write BOP (or insurance at all) but we do some of the processing work for companies writing BOP. Currently none of them do multi-class locations or Surplus and I would like to find out if there are execptions to this.

[crossins]

location 1 building 1 - 8 unit aptartment. location 1 bldg 2 6 unit apt. Location 2 - retail store - gun shop - lessors risk only
location 3- retail store - liquor store - lessors risk only
location 4 office - Podiatrist - lessors risk only
and so on.

Surplus = non admitted carrier (probably because of the occupancy in locations 2 and 3)

[mica.cooper]

Ok,

What about more than one class per location? Does that happen?

Thanks!

[crossins]

generally one building with mixed occupancies can only be rated for one.
For example, a building containing apartments, retail and office gets a composite rate. Many Carriers will write multiple locations,with many buildings and different occupancies. Throw in a liquor store or gun shop or day care center for example, and you are looking at............you guessed it......SURPLUS

More than one class per location - sure - there may be more than one building (even with the same street address) at the particular location.

[mica.cooper]

So,

No one knows of a company that rates more than one class per location? Say list the %class for example:

40% restaurant, ISO 3xxx
60% retail, 5xxx
by revenue or number of employees.

For a combination rating.

Thank You