A processing and servicing company qualifies for a Business Owner's Policy (BOP) only if their annual revenues are less than what amount?

For a processing and servicing company to qualify for a Business Owner's Policy (BOP), it must have annual revenues that are below a specified threshold. In this case, the correct answer indicates that the revenue limit is $2 million. This threshold is significant because BOPs are designed to provide a streamlined package of insurance for small to medium-sized businesses, which typically have lower exposure to risk compared to larger firms.

Policies like this offer various coverages, such as property and liability insurance, but they also come with eligibility criteria that ensure the right type of business is being covered. The $2 million revenue limit serves as a guideline to identify businesses that are still considered small enough to benefit from the efficiencies and tailored coverage provided under a BOP. Companies exceeding this limit usually present a more complex risk profile, making them less suitable for a BOP.

Understanding these financial parameters is crucial for insurance professionals when advising clients on their coverage options and ensuring compliance with underwriting standards.