Alabama Property and Casualty Practice Exam

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Upon what condition does coverage for Business Personal Property cease under a BOP?

Change of ownership
Transfer of business location
Conditions specified in the declarations
Expiration of policy term

The correct answer is: Conditions specified in the declarations

Coverage for Business Personal Property under a Businessowners Policy (BOP) ceases upon certain conditions specified in the declarations of the policy. The declarations outline the key coverage terms, including any limits, exclusions, and specific conditions under which coverage may no longer apply. This makes the declarations a vital part of the policy, as they dictate the terms and criteria that govern the coverage. If any of the specified conditions in the declarations are met—such as changes to the insured property, the business's status, or other listed factors—then the coverage for Business Personal Property may be terminated. This contrasts with other conditions like the change of ownership and transfer of business location, which, while important, do not automatically cause the coverage to cease unless explicitly stated in the policy. The expiration of the policy term does lead to the cessation of coverage, but this is a more general condition that applies to all types of insurance coverage, rather than a policy-specific condition detailing Business Personal Property.