Form BP DS 00 - Businessowners Declarations
1. What the form is
The Businessowners Declarations, form BP DS 00, serves as the cover page and a critical component of a Businessowners Policy (BOP). Its primary purpose is to summarize all the key information specific to the individual policy. This includes identifying the named insured, their mailing address, the policy period (start and end dates), and the specific location of the described premises. Crucially, it details the coverages selected by the insured, the corresponding limits of insurance for each coverage (such as buildings, business personal property, liability, and medical expenses), and the premium. The declarations page also lists any mortgageholders and identifies the form of the business (e.g., individual, partnership, corporation). It will also list any endorsements attached to the policy that modify its terms. Essentially, the BP DS 00 personalizes the standard BOP coverage form (like the BP 00 03) to a specific policyholder.
2. Classes of business it applies to
The BP DS 00 is used in conjunction with a Businessowners Policy, which is designed for a wide array of small to medium-sized businesses. While specific eligibility can vary by insurer, common classes of business that utilize a BOP, and therefore this declarations page, include:
- Retail Stores: Such as boutiques, hardware stores, or florists. For example, "Main Street Books & Brews," a small bookstore and coffee shop, would have a BP DS 00 outlining their property coverage for their building and inventory, as well as liability limits.
- Offices: Including those for professionals like accountants, lawyers, or insurance agents. For instance, "Smith & Jones Accounting" would use this form to specify their coverage for office contents and professional liability if endorsed.
- Service Businesses: Such as barber shops, nail salons, or dry cleaners (those that clean on premises). "Quick Clean Dry Cleaners" would have their equipment and customer goods liability (if covered by endorsement) detailed here.
- Restaurants: Particularly smaller, limited-cooking or fast-food establishments. "The Corner Cafe," a small diner, would find its specific coverage limits for building, contents, and business income on this form.
- Apartment Buildings and Residential Condominium Associations.
- Contractors: Certain types of contractors may be eligible.
- Self-Storage Facilities.
- Wholesale and Distribution Risks.
- Light Manufacturing.
- Hotels, Motels, and Inns.
Generally, businesses with less than $5 million or $6 million in annual sales and fewer than 100 employees, and with a physical location outside the home, are good candidates for a BOP. However, some programs have total floor area limitations, often around 35,000 square feet per location, though exceptions exist for certain classes like apartment buildings.
3. Special considerations
Several important points should be considered when using or reviewing the BP DS 00:
- Accuracy is Paramount: The information on the declarations page dictates the extent of coverage. An incorrect address, an improperly listed named insured, or inaccurate limits can lead to significant coverage gaps or disputes at the time of a claim. For example, if a business operates as a corporation but is listed as an individual on the declarations, it could create issues in identifying who is an insured under the liability section.
- Triggers Coverage: Many coverages within the BOP are only activated if a limit is shown on the declarations for that specific coverage. If a box for an optional coverage is not checked, or a limit is not entered, that coverage does not apply. For instance, if "Outdoor Signs" coverage is desired, a limit for it must be explicitly stated on the declarations.
- First Named Insured: The first named insured listed on the declarations has specific rights and responsibilities, including the ability to cancel the policy, make changes, pay premiums, and receive notices. It's crucial to ensure the correct entity is listed first.
- Relationship to Coverage Form (BP 00 03): The BP DS 00 must be read in conjunction with the Businessowners Coverage Form (e.g., BP 00 03). The declarations page provides the "who, what, where, when, and how much," while the coverage form details the terms, conditions, exclusions, and definitions of the insurance provided.
- State Variations: While the BP DS 00 is a standard form applicable in all states, state-specific endorsements or regulations might affect how certain information is presented or what is required. For example, the policy period might begin at 12:00 p.m. in some states instead of 12:01 a.m.
- Edition Dates: Insurance forms are periodically updated. The edition date of the BP DS 00 (often found in the form number, e.g., "07 13" for the July 2013 edition) should align with the edition date of the corresponding coverage form and endorsements to ensure consistency.
4. Key information for agents and underwriters
For agents and underwriters, the BP DS 00 is a foundational document in the policy lifecycle:
- Risk Assessment: The description of the business, premises information, and selected coverages/limits on the declarations provide a snapshot of the risk. Underwriters use this to confirm eligibility for the BOP program and to assess the exposure. For example, a restaurant indicating high gross sales might trigger a closer look to ensure it fits within the BOP eligibility guidelines.
- Pricing: The limits of insurance, chosen optional coverages, and any applicable deductibles shown on the declarations are direct inputs into the premium calculation for the policy.
- Identifying Coverage Gaps: Agents should carefully review the declarations with the client to ensure the limits are adequate and all necessary coverages are included. For example, if a business has a significant exposure to loss from equipment breakdown but this coverage isn't listed or has a low limit on the declarations, it represents a potential gap.
- Underwriting Guidelines: Insurers have specific underwriting guidelines for BOP eligibility, often related to the type of business, size (sales and square footage), and loss history. The information on the declarations is a primary tool for verifying adherence to these guidelines. For instance, a business described as a "Convenience Food Store with gasoline sales" would need its gasoline sales percentage reviewed against the insurer's BOP eligibility rules (e.g., up to 75% of total revenue might be acceptable).
- Endorsement Verification: The declarations will list all endorsements attached to the policy. Agents and underwriters must ensure that the correct endorsements are listed and that any scheduled information required by those endorsements is accurately reflected.
- Communication Tool: The declarations page is a key communication document between the insurer, the agent, and the insured. It clearly outlines the agreed-upon coverage and is often the first document reviewed when a policy question or claim arises.