1. Forms
2. BP
3. BP-01-35

Form BP 01 35: Texas Changes - Businessowners Policy

1. What the form is

Form BP 01 35, titled "Texas Changes," is a mandatory endorsement to the Businessowners Coverage Form (BP 00 03) in Texas. Its primary purpose is to modify the standard Businessowners Policy (BOP) to ensure compliance with specific Texas statutes and regulations governing insurance. This endorsement amends various provisions within the BOP to align with Texas law, which may differ from the standard ISO (Insurance Services Office) language or the laws of other states. It ensures that the policy adheres to Texas-specific requirements regarding aspects like cancellation and nonrenewal, notice provisions, and potentially other coverage modifications mandated by the state.

2. Classes of business it applies to

The BP 01 35 endorsement applies broadly to any business in Texas that is eligible for and written on a Businessowners Policy. The BOP itself is designed for small to medium-sized businesses across various sectors. While not exhaustive, real-world examples of businesses that would have this form attached to their BOP include:

• Small retail stores (e.g., boutiques, local grocery stores)
• Office-based businesses (e.g., accounting firms, law offices, real estate agencies)
• Service businesses (e.g., barber shops, beauty salons, repair shops)
• Restaurants (specifically smaller establishments meeting BOP eligibility)
• Contractors (certain types, depending on the insurer's specific BOP eligibility and underwriting guidelines for Texas)

Essentially, if a business in Texas qualifies for a BOP through an insurer using ISO-based forms, the BP 01 35 endorsement will be a standard part of their policy.

3. Special considerations

Several special considerations are important when dealing with Form BP 01 35:

• Mandatory Attachment: This is not an optional endorsement in Texas. If an insurer uses the standard BP 00 03, they must attach BP 01 35 (or an equivalent carrier-specific Texas compliance endorsement) to make the policy compliant with Texas law.
• Texas Law Precedence: The provisions within BP 01 35 will supersede any conflicting language in the base BP 00 03 form. This is crucial for claims handling and policy interpretation.
• Regulatory Updates: Texas insurance laws and regulations can change. Insurers must ensure their Texas Changes endorsements, like BP 01 35, are current with the latest legislative and regulatory mandates from the Texas Department of Insurance (TDI). For example, changes in laws regarding notice of cancellation, nonrenewal, or specific coverage requirements would necessitate updates to this form or the issuance of new, superseding endorsements.
• No Expansion of Coverage (Typically): Generally, state-specific "changes" endorsements like BP 01 35 are designed for compliance rather than to broaden coverage. Their main function is to align the policy with state legal requirements. However, specific Texas statutes might mandate certain minimum coverages or consumer protections that could be perceived as an expansion compared to a more restrictive standard form.

Real-world example: If Texas law mandates a 60-day notice period for policy nonrenewal for certain business types, and the standard BP 00 03 form specifies a 30-day period, the BP 01 35 would amend this to reflect the 60-day requirement for policies issued in Texas.

4. Key information for agents and underwriters

• Compliance Assurance: For agents, it's vital to understand that this form ensures the BOP they are selling is compliant in Texas. This is a key selling point, assuring clients their policy meets state requirements. For underwriters, confirming the correct and current version of BP 01 35 is attached is a fundamental part of the policy issuance process.
• Impact on Policy Language: Agents should be aware of how BP 01 35 modifies the standard BOP terms, particularly concerning policyholder rights in areas like cancellation, nonrenewal, and claims handling, as these are common areas for state-specific rules. Underwriters must be trained on these Texas-specific modifications to accurately assess risk and apply policy terms.
• No Direct Pricing Impact (Typically): The attachment of BP 01 35 itself usually doesn't have a direct, separate premium charge. The cost of complying with Texas regulations is generally factored into the overall base rates for BOPs in Texas. However, underlying Texas laws (e.g., specific coverage mandates) could influence the overall premium levels in the state compared to others.
• Underwriting Guidelines: While BP 01 35 is a compliance form, overall underwriting guidelines for BOPs in Texas will still apply. Underwriters need to consider the specific risks associated with Texas businesses (e.g., weather-related exposures like hurricanes or hail in certain regions, local liability trends) in conjunction with the policy terms as modified by BP 01 35.
• Review Carrier-Specific Forms: While BP 01 35 is an ISO form, some insurance carriers may have their own proprietary Texas-specific endorsements that achieve the same compliance. It's crucial for agents and underwriters to be familiar with the specific forms used by the carriers they work with.
• Potential for Broader Implications: Changes mandated by this endorsement, such as those related to "Your Right to Claim and Occurrence Information," can impact how insurers must respond to insured requests for loss history, which is a critical underwriting and renewal consideration.