Arkansas Insurance Adjuster Practice Exam

For how long does the BOP provide loss of income on an 'actual loss' sustained basis?

1. 6 months

2. 18 months

3. 24 months

4. 12 months

The correct answer is: 12 months

The Businessowners Policy (BOP) is an insurance policy designed for small and medium-sized businesses. It provides coverage for property damage, liability, and loss of income due to a covered peril. "Actual loss" means the actual amount of income lost during the time that the business is closed or unable to operate due to a covered loss. Option A is incorrect because 6 months is too short of a time period to accurately cover for actual loss sustained by a business. Option B is incorrect because 18 months also may not be enough time to cover the full extent of the actual loss sustained by a business. Option C is incorrect because 24 months is a longer time period than most businesses would need to recover from a covered loss. Therefore, option D, 12 months, is the most appropriate answer as it provides a reasonable and sufficient amount of time for a business to recover