AAIS BUSINESSOWNERS POLICY ELIGIBILITY

(June 2018)

INTRODUCTION

The American Association of Insurance Services (AAIS) Businessowners Policy’s eligibility requirements vary based on the type of occupancy. This general list of eligible classifications includes specific eligibility criteria. The eligibility was a change in the 01 15 edition of the manual and those changes are noted in bold.

HABITATIONAL

Habitational properties include apartment buildings, residential condominium buildings, and one-to-four family rental buildings. Bed and breakfast dwellings are eligible if they have fewer than 10 bedrooms. The following also applies to the building:

• Can include office occupancy but only if it is incidental
• Can have up to 35,000 square feet occupied by eligible retail, service, wholesale, or processing businesses but only if incidental to the habitational occupancy

The square footage of basement areas that are not open to the public is not to be included in the square foot area used to determine eligibility. The building owner's business personal property is also eligible.

Note: The six-story height limitation and the 60 living units restrictions have been eliminated.

OFFICE BUILDINGS

Buildings

Office buildings and office condominiums are eligible if they meet the following criteria:

• Height is no more than six stories
• Square footage is 100,000 or less

• Can include apartment occupancy but only when it is incidental to the office occupancy

• Can have up to 35,000 square feet occupied by eligible retail, service, wholesale, or processing businesses but only if incidental to the office building occupancy.

Business personal property

Office occupancy must be 35,000 square feet or less.

Business personal property of building owner and other office occupants is eligible.

The square footage of basement areas that are not open to the public is not to be included in the square foot area used to determine eligibility for building or business personal property.

MOTELS (01 15 eligibility addition)

Motels that meet the following criteria are eligible:

• Height is no more than three stories
• Restaurant occupancies but only if they are considered eligible BOP restaurant occupancies.
• No bar or cocktail lounge occupancy

RESTAURANTS

Buildings that have a cooking occupancy and/or restaurant occupancies must meet the following eligibility criteria:

• The restaurant area must be 7,500 square feet or less.
• Sales of alcohol cannot be more than 25% of the restaurant’s total receipts.
• Seasonal operations are not permitted. Restaurants may not be closed more than 30 consecutive days.
• Gross sales cannot be more than $6,000,000 per location.

The square footage of basement areas that are not open to the public is not to be included in the square foot area used to determine eligibility for building or business personal property.

Limited Cooking Restaurants and Fast Food Restaurants are added as subsets to the restaurant's occupancy. The definitions of the two do not impact overall eligibility for restaurant occupancies but they do impact the rating.

RETAIL, SERVICE, OR PROCESSING

Buildings

The following criteria apply to retail, service, or processing buildings:

• The occupancy must be primarily an eligible retail, service, or processing classification.
• The total building area cannot be more than 35,000 square feet.
• Incidental storage buildings of eligible classifications are eligible, as long as they do not have more than 35,000 square feet.
• Service or processing occupancies must generate at least 75% of their gross annual revenue from operations performed on premises.

The square footage of basement areas that are not open to the public is not to be included in the square foot area used to determine eligibility for building or business personal property.

Business Personal Property

The following criteria apply to business personal property in retail, service, or processing buildings:

• The occupancy must be an eligible retail, service, or processing classification.
• The total area the named insured occupies cannot be more than 35,000 square feet.
• The gross annual sales or receipts cannot be more than $6,000,000.
• Service or processing occupancies must generate at least 75% of their gross annual revenue from operations performed on premises.
• Incidental storage buildings of eligible classifications are eligible as long as they do not have more than 35,000 square feet.

The square foot area used to determine eligibility does not include basement areas not open to the public.

WAREHOUSES

The following criteria apply to warehouse buildings:

• Buildings used to store the named insured's goods are eligible, as well as the contents stored in such buildings. There is no square foot area limitation.
• Self-storage warehouses used to store property of others are also eligible. They also are not subject to the square foot area limitation.

· Building coverage can be written on self-storage warehouses that rent storage space to commercial customers or individuals. Property of Others the named insured keeps in its warehouse is not eligible for coverage.

WHOLESALE

Buildings

The following criteria apply to wholesale buildings:

• The occupancy must be an eligible wholesale classification.
• The total building area cannot be more than 35,000 square feet.
• Incidental storage buildings occupied by an eligible business are also eligible provided they do not have more than 35,000 square feet.

Business Personal Property

The following criteria apply to business personal property in wholesale buildings:

• The occupancy must be an eligible wholesale classification.
• The total area the named insured occupies cannot be more than 35,000 square feet.
• The gross annual sales or receipts cannot be more than $6,000,000.
• A business may not be classified as wholesale if it receives more than 25% of its gross annual revenue from direct sales to the public and 25% or more of its square foot area is open to the public.

The square footage of basement areas that are not open to the public is not to be included in the square foot area used to determine eligibility for building or business personal property.

MISCELLANEOUS ELIGIBLE CLASSIFICATIONS

Multiple Occupancy Buildings

Eligible tenant businesses in a multiple occupancy building with both eligible and ineligible occupancies are eligible.

Convenience Stores

Convenience stores that sell food are eligible, whether they sell gasoline or not. However, an otherwise eligible convenience store is not eligible if it has any of the following operations:

• Auto repair or service
• Car wash
• More than 75% of annual revenue from gasoline sales
• Propane or gas tank filling

Financial Institutions

Buildings leased to others for use as bank offices, credit unions, or other financial institutions are eligible.

Pet Stores

Pet stores and other businesses that own or keep animals are eligible. Coverage for animals is limited to the following:

• Animals the named insured boards that it does not own
• Animals the named insured owns that it holds for sale and keeps inside buildings

EXCLUDED BUSINESSES/INELIGIBLE OCCUPANCIES

These classifications are not eligible:

• Amusement facilities
• Automobile businesses. This includes dealers, service, repair, or auto salvage firms.
• Bars
• Churches
• Condominium buildings, other than office or residential condominiums
• Contractors whose off-premises operations account for 25% or more of their gross annual sales
• Farms

• Financial institutions, except buildings leased to others used as bank offices, credit unions, or other financial institutions
• Household personal property

• Manufacturing
• Parking lots or garages, other than incidental to otherwise eligible classifications
• Pubs