If the actual values exceed the limit of insurance, the businessowners policy (BOP) contains a seasonal increase provision that automatically increases the limit of insurance for business personal property by

In a businessowners policy (BOP), the seasonal increase provision is designed to accommodate fluctuations in inventory and business personal property values throughout the year. This provision automatically increases the limit of insurance for business personal property during certain times, typically reflecting seasonal trends that affect inventory levels.

The correct answer, 25%, reflects a common standard increase allowed by many insurance policies to provide adequate coverage during peak times, such as holidays or seasonal sales events, when business personal property might be higher than during off-peak periods. By setting the increase at this percentage, the insurance provides a balance that helps ensure the business is adequately protected without overextending insurance coverage unnecessarily. This feature is particularly useful for businesses that experience significant variations in property values depending on the time of year.

Other potential options (10%, 50%, and 75%) represent varying degrees of increase that might not align with typical industry standards or risk assessment practices established in the BOP structure. While they may be useful figures in other contexts, they do not reflect the provision commonly detailed for seasonal increases in a BOP.