Alabama Property and Casualty Practice Exam

Which of the following would NOT be eligible for coverage under a BOP?

1. Small retail store

2. Office building

3. Parking garage

4. Restaurant

The correct answer is: Parking garage

A Businessowners Policy (BOP) is designed to provide coverage for a variety of small to medium-sized businesses with relatively low risk profiles. It typically covers property, liability, and business interruption. However, not all types of businesses are eligible for coverage under a BOP. Parking garages generally do not qualify for coverage under a BOP because they present unique risks that differ from the more traditional businesses that this policy is meant to serve. These risks can include higher liability exposure due to the volume of customers and vehicles, as well as complex operational risks related to managing vehicles and customer interactions. Conversely, small retail stores, office buildings, and restaurants usually fit within the eligibility guidelines for a BOP. They typically involve lower risk operations that involve selling goods or services directly to consumers, which aligns with the policy's intent to cover standard business risks. This distinction is crucial in understanding the types of operations that a BOP is designed to protect.