AAIS BUSINESSOWNERS POLICY ELIGIBILITY

(May 2025)

INTRODUCTION

The American Association of Insurance Services (AAIS) Businessowners Policy’s eligibility requirements vary based on the occupancy type. This general list of eligible classifications includes specific eligibility criteria. Eligibility was changed 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 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
• Basement square footage not open to the public should not be included in the total square foot area used to determine eligibility.

Business Personal Property

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

· Business personal property of the building owner and other office occupants is eligible, including office condominiums.

· Basement square footage not open to the public should not be included in the total square foot area used to determine eligibility.

MOTELS (01 15 - BOP Manual - 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.

· Basement square footage not open to the public should not be included in the total square foot area used to determine eligibility.

The following are added as subsets to the restaurant's operations:

· Limited Cooking

This exposure does not produce grease-laden vapors or smoke that would require an exhaust system. It is designed for a deli-style operation focused on preparing and serving cold foods or foods that do not need cooking equipment, which require an exhaust system. Therefore, solid fuel cooking, grilling, open broiling, deep frying, and roasting are not allowed.

· Fast Food

This exposure does produce grease-laden vapors or smoke creating a need for an exhaust system. Therefore, deep fat frying, grilling, roasting, and enclosed broiling are allowed. However, solid fuel and open broiling are still not permitted.

o The restaurant must comply with NFPA 96 to ensure the safety and proper maintenance of the entire kitchen ventilation system.

NOTE: Liquor Liability is not available for the restaurant class of business.

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 per building.
• Incidental storage buildings of eligible classifications are eligible, as long as they do not have more than a total of 35,000 square feet.
• Service or processing occupancies must generate at least 75% of their gross annual revenue from operations performed on premises.

· Basement square footage not open to the public should not be included in the total square foot area used to determine eligibility.

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 per building.
• The gross annual sales or receipts cannot be more than $6,000,000 at any insured location.
• 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 a total of 35,000 square feet.
• Basement square footage not open to the public should not be included in the total square foot area used to determine eligibility.

WAREHOUSES

The following criteria apply to warehouse buildings:

• Buildings used to store the named insured's goods are eligible, as are the contents stored in such buildings. There is no square foot area limitation.
• Buildings rented or leased as self-storage warehouses to store property of others are also eligible and are not subject to the square foot area limitation. They can be rented or leased to a commercial customer or individual.
• Business Personal Property of insured’s customers is ineligible for coverage.

· Endorsement BP 0735—Self Storage Warehouses is added. It extends Coverage C—Loss of Income to include Loss of Rents when self-storage warehouses are written.

· Customer’s Property Legal Liability is provided while the insured’s customers property is stored in the insured’s self-storage warehouse. It is subject to a $25,000 each occurrence limit unless a different limit is stated on the declarations.

Additional coverage provided:

A $5,000 annual aggregate limit is added for the Lockout Sale, Removal, or Disposal of Property when the insured denies customers access to their property or when the insured sells, removes, or disposes of the customers' property in order to reclaim storage space following a customer's default. The property deductible on the declarations applies.

WHOLESALE

Buildings and Business Personal Property

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 per building.
• Incidental storage buildings of eligible classifications are eligible as long as they do not have more than a total of 35,000 square feet.
• 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.
• Basement square footage not open to the public should not be included in the total square foot area used to determine eligibility.

• The gross annual sales or receipts cannot be more than $6,000,000.

MISCELLANEOUS ELIGIBLE CLASSIFICATIONS

Multiple Occupancy Buildings

If a tenant qualifies as a member of an eligible class of business but is located within a multi-occupancy building that houses both eligible and ineligible tenants, that tenant is considered qualified.

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 but does not own.
• Animals the named insured owns that it holds for sale and keeps inside buildings.
• Coverage for animals as stated above is limited to an animal killed by or destroyed because of a covered peril.

EXCLUDED BUSINESSES/INELIGIBLE OCCUPANCIES

These classifications are not eligible:

• Automobile businesses. This includes dealers, service, repair, or auto salvage firms.
• Bars or Pubs
• 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
• Amusement facilities