Property and Casualty Insurance Practice Exam

Which of the following is NOT a covered peril under the BOP?

1. Fire

2. Theft

3. Acts of war

4. Vandalism

The correct answer is: Acts of war

The correct choice indicates that acts of war are not considered a covered peril under a Businessowners Policy (BOP). Insurance policies typically define a specific set of perils that are covered, which usually includes common risks like fire, theft, and vandalism. However, acts of war are often explicitly excluded from coverage due to the unpredictable and extensive nature of war, which can lead to significant and uncontrollable losses beyond the scope that standard insurance policies are designed to address. In contrast, fire is a common peril that the BOP covers since it poses a significant risk to businesses. Theft and vandalism also fall under typical coverage provisions because they are frequent threats to property and business operation. Thus, while the other options represent everyday risks that can occur, acts of war fall into a category that most insurance policies exclude to manage their risk exposure effectively.