Under a Building and Personal Property Coverage Form (BPP), if there is a loss of $350,000 to a building and $70,000 to business personal property, what amount should the policy cover?

The Building and Personal Property Coverage Form (BPP) is designed to cover both the structures and personal property of a business. When assessing a loss, the coverage should typically reflect the actual values of the losses incurred unless there are specific endorsement limits or deductibles stipulated by the policy.

In this scenario, the loss to the building is $350,000 and the loss to business personal property is $70,000. The policy should cover the full amount of each loss if the limits allow for it. However, it seems that the policy might include an aspect of coinsurance or a limit that results in a total payout of $347,500 for the building loss rather than the full $350,000.

This adjustment could be due to a coinsurance clause wherein if the insured does not carry insurance to value (typically a percentage of the total value of the property), there could be a penalty in the amount paid out after a loss. For instance, if the policy dictates that the insured should maintain a certain percentage of the building's value as coverage but only insures for less, the payout may be reduced accordingly.

Therefore, given that the answer indicates a loss settlement of $347,500 for the building and $70,000 for the personal