Under a Businessowners Policy (BOP) with no optional coverages, which property loss would be covered?

• A. Merchandise destroyed when a customer trips and knocks over a display of fragile gift items
• B. Building damage from a storm
• C. Employee theft
• D. Water damage to stored inventory

Answer: (A)

A Businessowners Policy covers the insured’s business personal property on the premises, including inventory or merchandise. When a customer trips and knocks over a display, the merchandise is directly damaged on the business’s premises—this is a covered direct physical loss to the property the policy is designed to protect, and no extra endorsement is needed for this scenario.

By contrast, employee theft isn’t covered under the standard BOP without a fidelity endorsement, so that loss isn’t automatically included. Water damage to stored inventory could be covered if it results from a covered peril (like a sudden, accidental discharge) but may be excluded for other water events (such as floods) unless a special endorsement is added. Building damage from a storm could be covered as well, but the example of the damaged inventory on display is the clearest, most straightforward property loss the base BOP covers.