15.1 Eligibility

Eligible Risks

A Businessowners Policy (BOP) is designed for small- to medium-sized businesses with lower-risk operations, unlike a Commercial Package Policy, which is intended for larger or more complex businesses. In general, businesses with annual gross sales over $6 million or that occupy more than 35,000 square feet are not eligible, although exceptions may apply. Eligibility also depends on factors such as the number of stories, type of business, and business operations, with specific requirements varying by insurer.

Types of Eligible Businesses

Business Type	Eligibility Requirements
Restaurants	Limited-line cooking and fast food restaurants occupying up to 7,500 square feet of space are eligible. Max capacity requirements may also apply, and only sales of beer and wine are allowed. Eligible restaurants include bakeries and pizza shops.
Office Buildings	Office buildings must be occupied primarily for office purposes, with a height of up to 6 stories and total area of up to 100,000 square feet.
Contractors	Eligible contractors include those whose total annual payroll does not exceed $300,000, and no more than 10% of total annual gross sales comes from subcontracted work. Work may not be done at heights over 3 stories.
Apartment Buildings	Apartment buildings of any size are eligible, including residential condominium associations. Incidental occupancies, such as an office or retail space, are allowed if their total area does not exceed 35,000 square feet.
Condominium Commercial Unit-Owners	Eligible units include those used for mercantile, wholesale, service or processing, and contracting occupancies. This could include units used for bookstores, toy stores, furniture stores, and other retail stores.
Motels	Eligible motels may be any size, but they are limited to a height of 3 stories and may not be seasonal in their operation. Eligible restaurant occupancies are also allowed, but the motel may not contain a bar or cocktail lounge.
Processing and Service Risks	Processing and service businesses include dry cleaners, laundromats, barber and beauty shops, dental labs, funeral homes, appliance repair services, and print shops.
Convenience Food Stores, Grocery Stores, and Supermarkets	If a convenience food store also sells gasoline, the food store must be at least 3,000 square feet in total area. There may be eligibility limitations regarding the amount of gas sales, such as gas sales not exceeding 75% of total annual gross receipts. Auto repair services, car washes, and propane tank filling stations are typically not allowed. Grocery stores and supermarkets must meet the standard eligibility requirements.
Self-Storage Facilities	These facilities may be any size, but they are limited to a height of 2 stories. Cold storage or storage of industrial materials, chemicals, pollutants, or waste do not qualify.
Wholesalers	To be eligible, retail operations may not account for more than 25% of a wholesaler’s annual gross sales, and no more than 25% of the total floor area may be open to the public.

Ineligible Risks

The following businesses are generally ineligible for a Businessowners Policy (BOP):

• Automobile operations, including:
  • Automobile repair and service stations
  • Automobile, mobile home, and motorcycle dealers
  • Parking lots and garages (unless incidental to an otherwise eligible business)
• Restaurants, bars, and grills that do not meet BOP restaurant eligibility requirements
• Places of amusement, such as theme parks
• Financial institutions, such as banks
• Manufacturers

If an otherwise eligible business contains an ineligible operation, it becomes ineligible for a Businessowners Policy (BOP). For example, a building that includes a manufacturing business or a restaurant located within an amusement park does not qualify for BOP coverage.

Businessowners Coverage Form

Eligible businesses can be insured under the Businessowners Coverage Form, which includes three main sections:

• Section I – Property
• Section II – Liability
• Section III – Common Policy Conditions