ISO BUSINESSOWNERS
PROGRAM ELIGIBILITY
(June 2026)
|
Offices (Including Office And Commercial
Condominium Associations) |
Rule 22 in the
Businessowners Section of the Insurance Services Office (ISO) Commercial Lines
Manual (CLM) establishes specific eligibility criteria, requirements, and
guidelines for the ISO Businessowners Program. Risks that do not meet the
eligibility criteria should not be written in this program. Additionally, many
insurance companies have their own separate eligibility requirements that must
also be considered alongside ISO's rules.
The ISO Businessowners
Program has its own separate classification table. Risks not included in the
specified business classes are ineligible. Furthermore, each risk must satisfy
specific additional criteria based on the business class and occupancy group.
ISO has published a new
07 25 edition for the CLM Division Ten Businessowners. These changes are
highlighted in bold.
(07
25 edition)
a.
Apartments (Including Residential Condominium Associations)
·
All
buildings are eligible, regardless of square foot area.
·
The 07 25 edition no longer
restricts which incidental occupancies can be written. Eligible incidental
occupancies are now allowed, but their total square footage cannot exceed
35,000 square feet. Contracting operations are no longer specifically listed as
well.
·
Coverage
is available for business personal property owned by building owners in
eligible apartment buildings.
b.
Condominium Commercial Unit-Owners
The 07 25 edition has been updated to reflect that eligibility of the
Condo Commercial Unit Owners is in line with the revisions to the
Businessowners Classification Table.
(07 25 edition)
This is a new eligible
risk with the 07 25 edition. Building and business
personal property for auto service risks qualify for coverage under the BOP Program,
as specified in the BOP Classification Table Section of the manual. Only auto
service risks listed in the classification table are eligible for the BOP
Program. Examples include, but are not limited to, audio services, auto body shops, car washes, repair shops, tire dealers,
upholstery shops, and quick lubes.
(07
25 edition)
Only contractors listed
in the classification table are eligible. In addition to the general
eligibility criteria above, an eligible contractor is subject to the following:
The following
contractors or activities are ineligible for the BOP Program, regardless of
whether they participate in eligible activities:
·
General Contractors.
o A General Contractor manages the entire
project, handling all aspects of the work instead of just a portion for their client.
o They also oversee the hiring process and
coordinate subcontractors.
·
Contractors using cranes.
·
Contractors who repair, install, or service boilers,
burglar alarms, automatic fire extinguishing systems, elevators, escalators, or
computers, or who have previously worked on these items.
·
Contractors who manufacture or sell products bearing their
own name.
·
Contractors who currently or have previously been involved
in any of the following:
o Demolition, blasting,
wrecking, high-pressure boiler work, or liquid petroleum gas (LPG) operations.
o Insulation work.
o Lawn chemical spraying.
However, when performed by a landscape gardener, it is permitted if it complies
with all applicable standards, statutes, ordinances, regulations, or licensing
requirements at any level of government.
o Operations involving
hazardous materials or pollution control, including asbestos, lead, and radon
mitigation and testing.
·
Contractors engaged in any of the following:
o Sales, service, or
installation of automatic opening doors or garage doors for residential or
commercial purposes.
o
Heavy construction that involves the following; however, it
is not limited to the following:
|
§ Crane or derrick
installation or rigging |
§ Cable laying and
cable installation |
§ Scaffolding, hoists,
tower erection |
|
§ Pipeline construction |
§ Iron or steel
erection |
§ Grading of land |
|
§ Dredging |
§ Drilling |
§ Excavation |
|
§ Bridge, caisson,
cofferdam, dam, dike, dry dock, jetty, levee or pier construction |
§ Sandblasting |
§ Tunneling |
o Work involving ship
repair or painting
o Sheet metal or
carpentry work performed exclusively in the shop
o Contracting work
involving the removal of trees or tree services
o
Contracting work involving waterproofing
o Wood and coal stove
installation
With the 07 25 edition, this section was renamed from Mercantile to Retail.
Instructions for risks related to on- or off-site repair have been added.
Convenience Food Stores, Grocery Stores, and Supermarkets are now included in
this section under Section b., with updates to the provisions outlined
below.
a. General
Building and business
personal property for retail risks can qualify for coverage under the BOP
Program, as specified in the BOP Classification Table section of the manual,
provided they meet the following additional eligibility requirements:
·
On-site repair
o
This
should be classified as retail unless a specific repair classification is
indicated in the BOP Classification Manual.
·
Off-site repair
o
Is
eligible only up to 25% of the total annual sales.
b. Convenience Food
Stores, Grocery Stores And Supermarkets
These establishments,
with or without gasoline sales and with or without limited cooking or quick
service restaurants as defined below, are eligible, subject to the rules
that apply to these classes. In addition to the general eligibility criteria
indicated above, the following requirements also apply:
·
It
must have at least 3,000 square feet of total floor area when it also sells
gasoline. Otherwise, it is a gasoline station and is not eligible.
·
It
cannot fill propane or kerosene tanks.
·
Grocery
Stores and Supermarkets with gasoline sales are eligible for the BOP, subject
to the same criteria as above, i.e., must have a total square footage of 3,000,
and cannot fill propane or kerosene tanks.
NOTE: With the 07 25
edition, "fast food" was replaced with "quick service," and
references to auto service or repair work and car wash operations have been
removed.
c. Internet Retailers
The 07 25 edition
introduces this new eligible category. An internet retailer is defined as a
retail business that operates exclusively online. This also covers the risks of
online retail activities conducted from a location separate from their physical
store. These are further categorized into specific classes based on property
exposures as outlined below:
·
Internet Retail
o Low-risk retailer selling products with low susceptibility, including
air-conditioning equipment and appliances, as well as auto parts, electrical
and lighting items, hardware, and tools.
o Medium-risk retailer
selling products with moderate susceptibility, including bakeries, beverages,
candy, casual or non-specialty clothing, furniture, groceries, health or
natural foods, jewelry, toys, or other items not classified as Internet Retail
Low or High classifications.
o High-risk retailer
selling products prone to damage or theft, such as books, magazines, cameras,
photographic equipment, specialty or formal wear, cosmetic or beauty supplies,
pharmacies with drugs, dry goods, electronics, fabric, farm or gardening supplies,
floor coverings, hobby or art supplies, leather goods, miscellaneous gifts or
novelties, musical instruments, music, prerecorded videos, paper or stationery,
or shoes.
Building and business personal
property for internet retail risks are eligible for coverage under the BOP
Program but are subject to the following additional eligibility requirements:
·
No more than 10% of direct retail sales
·
Cannot directly import products for
retail sale
(07
25 edition)
The 07 25 edition adds
Bed-and-Breakfast Inns, Hostels, Hotels, and Motels, which are defined below.
In addition to the general eligibility guidelines, the following specific
criteria also apply:
·
A building that exceeds the 35,000 square foot limitation
remains eligible for the BOP Program.
·
If the building has exterior access to guest rooms, it
cannot exceed three stories.
·
Risks with additional eligible occupancies continue to
qualify for the BOP Program.
·
Risks must not be closed for more than 30 consecutive days
from seasonal closures.
·
A bar or cocktail lounge is not eligible if it has a
separate exterior entry door.
Definitions are added:
BED AND BREAKFAST
This is when an owner,
manager, or caretaker occupies the property, or if they live elsewhere on the
same property. It does not cover operations with more than 10 guest bedrooms.
Meals are provided free of charge to guests. If any meals are offered for an
additional fee, that must be classified and rated separately, using the
appropriate restaurant category.
HOSTEL
This is lodging that
typically includes shared spaces like living rooms, sleeping areas, or
bathrooms.
HOTEL
This is typically a
multi-story building equipped with internal stairways, elevators, and room
entry doors. Unlike motels or motor lodgings, hotels often provide meeting
facilities and other services motels and hostels typically do not offer.
MOTEL
This is typically a
lodging facility with 1-3 stories, basic services, and exterior access doors.
Buildings primarily
occupied for office purposes not more than six stories
high or more than 100,000 square feet are eligible.
Business personal property in offices that occupy 35,000 square feet or less is
also eligible. In addition, the following incidental occupancies are permitted:
(07
25 edition)
Eligible businesses
must be processing or service companies listed in the classification table,
subject to the general criteria above. Additionally, off-premises operations
cannot account for more than 25% of annual gross sales.
The following
additional eligibility requirements also apply:
·
Repair risks involving both retail and on-premises services
should be categorized as retail.
·
Fitness studios cannot be more than 7,500 square feet in
total floor area. Studios providing childcare or teaching contact or
combat-related activities are ineligible.
·
Places of worship cannot be more than 7,500 square feet in
total floor area. Those that provide childcare, serve as event centers, or
include full kitchens are ineligible.
(07
25 edition)
With the 07 25 edition,
restaurants are revised to align with the new eligibility rules based on
revisions to the BOP Classification Tables. As a result, only the building and business personal
property for the specified types of restaurants and those listed in the
Businessowners Classification Table Section are eligible for coverage under the
BOP Program.
This category includes operations with limited cooking
exposures or operations that qualify as quick service restaurants. It also
includes casual and fine-dining restaurants. Each type of restaurant has its
own definition and eligibility criteria.
NOTE: In the 07 25 edition, "quick service restaurants" replaces
"fast food service restaurants."
These restaurants use equipment that does not require NFPA-approved
commercial exhaust systems, such as most home-style pizza ovens, small grills,
toasters, and warmers. Cooking methods that generate grease-laden vapors, such
as grilling, open broiling, deep-fat frying, roasting, barbecuing, or
solid-fuel cooking (e.g., mesquite, charcoal, or hardwood), disqualify a risk
because they require proper exhaust systems.
The following
additional eligibility criteria apply:
·
Floor
area must not be more than 7,500 square feet.
·
Seating
is restricted to a maximum of 75 people.
·
The
risk may or may not offer table service.
·
Sales
of beer or wine cannot exceed 25% of total sales. Serving hard liquor is not
permitted.
·
No
bars or cocktail lounges.
·
Catering
and off-premises food service cannot exceed 10% of total sales.
·
Seasonal
operations are not eligible. These are operations closed for more than 30
consecutive days.
With the 07 25 edition, Fast Food Restaurants are now
referred to as Quick Service Restaurants.
These restaurants
have limited types of cooking devices. Restaurant operations that produce
grease-laden vapors to the extent they need exhaust systems are eligible.
However, eligibility is limited to grilling, enclosed broiling, deep-fat
frying, roasting, or barbecuing. The reference to open broiling and solid
fuel cooking has been removed from the 07 25 edition.
The following
additional eligibility criteria apply:
·
Floor
area must not be more than 7,500 square feet.
·
Seating
is restricted to a maximum of 150 people.
·
No
table service offered.
·
Sales
of beer or wine cannot exceed 25% of total sales. Serving hard liquor is not
permitted.
·
No
bars or cocktail lounges.
·
Catering
and off-premises food service cannot exceed 10% of total sales.
·
Seasonal
operations are not eligible. These are operations closed for more than 30
consecutive days.
·
The
risk must install and maintain an automatic extinguishing system for cooking
equipment that meets or exceeds NFPA Standard #96.
National Fire
Protection Association Standard For Ventilation
Control And Fire Protection Of
Commercial Cooking Operations (NFPA Standard #96)
This section is added
with the 07 25 edition.
·
NFPA Standard #96 includes the following:
o Hoods, ducts, and all
surfaces of grills, ranges, deep fat fryers, and broilers are covered by an
automatic extinguishing system.
o A contract is required
to be in place with semi-annual inspection and maintenance of the extinguishing
system, hood, and ducts.
o There must be a manual
release along the exit path from the cooking area.
o Temperature settings
for systems with detectors should be set above the filters, or those with
detectors should be set below the filters, configured at the specified levels.
o A portable fire
extinguisher, designed according to NFPA Standard #96 and suitable for the
extinguishing agent used in the hood and duct fire protection system, must be
accessible in the kitchen.
o All deep fat fryers
must be equipped with separate high-limit controls that turn off the fuel when
the temperature reaches the level specified in NFPA Standard #96.
o There must be a minimum
clearance between the hood, duct, and combustible structures, as outlined in
NFPA Standard #96.
In the 07 25 edition, the title "Casual Dining Restaurants" is
now "Full Service Restaurants."
These restaurants offer
moderately priced meals in a casual atmosphere. Customers sit down, order, and
are served, typically paying afterward. Some may feature buffets and take-out
options. They may or may not serve alcohol such as beer, wine, or liquor.
Additional eligibility requirements include:
·
Floor
area must not be more than 7,500 square feet.
·
Seating
is restricted to a maximum of 150 people.
·
Sales
of beer or wine, or liquor cannot exceed 50% of total sales.
·
Catering
and off-premises food service cannot exceed 10% of total sales.
·
Seasonal
operations are not eligible. These are operations closed for more than 30
consecutive days.
·
The
risk must install and maintain an automatic extinguishing system for cooking
equipment that meets or exceeds NFPA Standard #96.
·
Dancing
is not permitted.
·
Live
entertainment, including karaoke, is prohibited. However, incidental music,
such as playing a piano, is permitted.
·
Bar
operations are not permitted when full table service is unavailable.
Additionally, conduct of bar activities solely for drinking alcohol is
prohibited.
NOTE: In the 07 25 edition, “Happy hour and similar promotions are prohibited”
has been removed.
This type of restaurant is added in the 07 25 edition.
Brewpub
This
type of restaurant primarily brews beer, ale, or malt liquor and sells it
retail for on-site consumption, often accompanied by appetizers or meals. The
main attraction of brewpubs is their wide variety of beers available by the
glass.
Brewpubs
must meet the following additional eligibility criteria:
·
Floor area must not
be more than 7,500 square feet.
·
Seating is
restricted to a maximum of 150 people.
·
Off-site sales of
beer, ale, or malt liquor cannot exceed 25% of total sales.
·
Catering and
off-premises food service cannot exceed 15% of total sales.
·
Seasonal operations
are not eligible. These are operations closed for more than 30 consecutive
days.
·
If preparing food
other than limited cooking, the risk must install and maintain an automatic
extinguishing system for cooking equipment that complies with NFPA Standard
#96.
·
Dancing is not
permitted.
·
Live entertainment,
including karaoke, is prohibited. However, incidental music, such as playing a
piano, is permitted.
These restaurants serve
high-quality food prepared by well-trained chefs and served by attentive wait
staff. Alcoholic beverages are served. Their décor is usually valuable and
extensive, including furniture, tableware, lighting, and art.
Additional eligibility
requirements include:
·
Floor
area cannot exceed 7,500 square feet.
·
Seating
capacity is limited to 150 people.
·
Sales
of beer, wine, and/or liquor cannot exceed 75% of total sales.
·
Catering
operations and serving food off premises cannot generate more than 15% of total
sales.
·
Seasonal
operations are not eligible. These are defined as operations that are closed
over 30 consecutive days.
·
The
risk must install and maintain an automatic extinguishing system for cooking
equipment that meets or exceeds NFPA Standard #96.
·
Dancing
is not permitted.
·
Live
entertainment, including karaoke, is prohibited. However, incidental music,
such as playing a piano, is permitted.
·
The
Maitre'd supervises the wait staff and controls
customer turnover.
·
The
chef supervises food preparation and other kitchen operations.
NOTE: Restrictions stating "Happy hour and similar promotions are prohibited and Bar operations are for only customers seated in the restaurant or for those waiting to be seated” have been removed from the 07 25 edition.
This type of restaurant is added in the 07 25 edition.
This type of restaurant mainly
offers wine for on-site consumption. A common feature is a broad selection of
wines by the glass, often accompanied by appetizers or meals. If a wine bar is
linked to a specific wine retailer or other outlet with retail off-premises
sales exceeding 75%, it should be classified as Beverage - Beer or Wine -
Retail.
Additional eligibility
requirements include:
·
Floor
area cannot exceed 7,500 square feet.
·
Seating
capacity is limited to 75 people.
·
Table
service may or may not be offered.
·
Excluding
wine, sales of beer or liquor cannot exceed 10% of total sales.
·
Catering
operations and serving food off premises cannot generate more than 10% of total
sales.
·
Seasonal
operations are not eligible. These are defined as operations that are closed
over 30 consecutive days.
·
If
preparing food other than limited cooking, the risk must install and maintain
an automatic extinguishing system for cooking equipment that complies with NFPA
Standard #96.
·
Dancing
is not permitted.
·
Live
entertainment, including karaoke, is prohibited. However, incidental music,
such as playing a piano, is permitted.
ISO relies on NFPA Standard #96—Standards for Ventilation Control and
Fire Protection of Commercial Cooking Operations—to determine restaurant
acceptability. Adhering to these guidelines is vital to controlling the risk of
fire. ISO provides a summary of the standards to help determine eligibility,
though it does not provide a full description.
Restaurants that generate grease-laden vapors from cooking should meet at
least the following requirements:
·
An
automatic extinguishing system is required. It must extend into hoods and ducts
and cover all surfaces of grills, ranges, deep-fat fryers, and broilers. Kidde
and Ansul provide these systems.
·
An
inspection and maintenance contract for the extinguishing system must be in
place. The inspection should include hood and ducts to prevent grease buildup
inside. At minimum, inspections and maintenance should occur semi-annually;
however, risks that generate large amounts of vapor may require quarterly or
monthly visits.
·
A
manual release for the system that employees can easily pull when exiting the
cooking area must be in place.
·
Detectors
should be placed above or below the filters to identify when the temperature
surpasses set limits.
·
Portable
fire extinguishers must be readily accessible, filled with suitable
extinguishing agents compatible with the kitchen's
hood and duct fire protection system, and properly operated by trained
employees.
·
Deep
fat fryers must be equipped with automatic fuel
shut-off valves that activate if the temperature surpasses a specified limit.
·
Ensure
a minimum clearance between combustible materials in walls, ceilings, or roofs
and the hood and ducts. This clearance prevents heated metal that carries
grease-laden vapors from contacting combustible materials that could ignite.
While a certain number of inches of clear space are required, this distance can
be reduced by using fire-retardant materials. The main objective is to keep
combustible items cool, despite the inside of the hood or duct being hot.
These facilities are
not limited by total square footage. However, buildings cannot exceed two
stories. Facilities that store refrigerated goods, industrial materials,
chemicals, pollutants, or waste are not eligible.
(07
25 edition)
Subject to the general
eligibility criteria, only wholesale and distribution risks listed in
the classification table are eligible. The following additional restrictions
apply:
(07
25 edition)
In
the 07 25 edition, the separate lists for ineligible
occupancies—one for Contractors and another for General ineligible
occupancies—are removed. The new edition no longer includes a distinct list of
ineligible occupancies specifically for Contractors, as well as the following:
·
Auto Repair or Service Stations have been removed from the
ineligible list since specific Auto Service Risks have been added to the list
of eligible occupancies in the 07 25 edition.
·
Ineligible Contractors have been removed from ineligible
occupancies since they are now specifically listed in a separate section within
the Contractors section of the 07 25 edition of the
CLM.
·
Bars
and pubs are now listed as other than those eligible restaurant
classifications listed in the BOP Class Table Section of the CLM.
·
Buildings
occupied by manufacturing occupancies are now listed as other than those
eligible restaurant classifications listed in the BOP Class Table Section of
the CLM.
·
Places of Amusement has been
removed.
NOTE: The removal of Places of Amusement as ineligible may be due to the
addition of the classification for Arcade or Other Gaming Centers – class code
70500, which applies to group gathering spaces for playing games, including
board and arcade games. However, this class does not apply to casinos or
amusement centers with rides.