The cornerstone of the MSO BOP is a thirty-page booklet that includes in a single document all primary property and business interruption coverages, both causes of loss property options, liability coverage, and the applicable policy definitions and conditions. Several commonly used endorsements, such as water backup coverage, are preprinted in the body of the policy, thereby eliminating the need for separate attachments; each of these endorsements can be triggered simply by listing the endorsement number in the Declarations. MSO refers to these options as "trigger endorsements," but the form itself does not refer to these options as "endorsements." A list of the form's trigger endorsements follows this analysis. State-specific requirements or unusual coverage needs may require additional, separate endorsement(s).

In contrast to other insurance forms that provide incidental coverages as exceptions to exclusions, MSO uses "pure exclusions" and shows the "exceptions" as supplemental coverages. Consequently, MSO's exclusions tend to be shorter, and the list of supplemental coverages tends to be longer, when compared with other BOPs.

Topics covered:

Part II A – main liability coverages

Part II B – supplemental coverages

Part II C – liability not insured

Part II D – special liability conditions

Common exclusions – parts I and II

Common glossary – parts I and II

Common conditions – parts I and II

Endorsements reprinted in the MSO businessowners policy (BU 04 01)

Part II A – Main Liability Coverages

 Application of This Insurance (Part II)

This insurance applies to liability arising out of your premises and business/operations, designated in the Declarations or elsewhere in this policy, to the extent covered in this policy, or those newly acquired or formed by you during the current policy period as provided in the definition of insureds.

All provisions applicable to your business/operations and your premises designated in this policy apply to additions, changes, and new entities, unless otherwise modified.

We have no obligations to provide any insurance or service, or pay any expenses or any sums, other than those specifically described as applicable and insured in this policy.

 Analysis

 Part II of the MSO BOP provides the liability coverages. The two main liability coverages in Part II A cover bodily injury and property damage liability to others (Coverage E) and medical payments to others (Coverage F). Personal and advertising injury is one of the supplemental coverages; it is not one of the main liability coverages. As with the property section of the policy, incidental coverages that other general liability forms treat as exceptions to exclusions are found in MSO's policy as supplemental coverages.

 Part II B's eleven supplemental coverages begin with what others forms refer to as supplementary payments. MSO's liability exclusions are in Part II C. Finally, Part II D contains the conditions that apply only to the BOP's liability coverages.

 The preamble to Part II makes it clear that it applies to the named insured's premises and operations. As defined in the glossary, "your premises" includes not only premises that are occupied, owned by, or rented to the named insured, but also premises the named insured has abandoned, sold, or transferred to others, even if they are not listed in the policy. The preamble also makes it clear that coverage applies to premises and business/operations that are acquired or formed by the named insured during the current policy period.

 According to the form's Common Glossary, Part II of this policy defines "insured" differently than Part I. In Part I, "insured" means only the named insured. In Part II, parties other than the named insured may also be insureds, depending on whether the named insured is an individual; a partnership, joint venture, or limited liability company; or another organization.

 If the named insured is an individual operating as a sole proprietor, the named insured's spouse is also an "insured" with respect to the business.

 If the named insured is a partnership, joint venture, or limited liability company, then that entity, its partners or members, and their spouses are all insureds with respect to the entity's conduct. Even if newly acquired or formed, a partnership, joint venture, or limited liability policy is not an insured unless it is named in the policy.

 If the named insured is a corporation or some other organization, insureds include executive officers (as defined in the organization's governing documents) or directors performing their duties as such, stockholders (but only with respect to their liability as such), employees, real estate managers, and—for the first 120 days—a newly acquired or formed business entity that is not otherwise insured in which the named insured has a majority interest.

 Coverage E – Liability to Others