Hawaii Insurance Adjuster License Practice Exam

Which of the following time periods is ordinary payroll coverage limited to in case of a business income loss under the BOP?

1. 45 Days

2. 30 Days

3. 60 Days

4. 90 Days

The correct answer is: 60 Days

Ordinary payroll coverage under the Businessowners Policy (BOP) is limited to a specific time period during which a business experiences a loss of income due to a covered event. In this case, the correct answer indicates that ordinary payroll coverage is limited to 60 days. This provision allows businesses to continue paying their employees during the recovery period following a loss, which is a crucial aspect of maintaining operations and ensuring that the business can resume normal functioning after the interruption. This time limitation is designed to balance the need for support during a critical recovery phase with the understanding that an extended payroll obligation may not be feasible or necessary. By specifying 60 days, the policy ensures that businesses have enough time to stabilize operations and plan for the future while also limiting exposure to prolonged claims that may complicate the adjustment process. The other options suggest shorter or longer periods, which do not align with the standard provisions typically found in BOP policies regarding ordinary payroll coverage. Hence, they do not reflect the structure and intent of the coverage offered under these policies.