How does the "named peril" endorsement under BOP affect premiums?

The named peril endorsement under a Businessowners Policy (BOP) typically reduces premiums because it limits coverage to specific risks that are explicitly named in the policy. This targeted approach means that the insurer is taking on less risk compared to an open peril policy, which covers a broader range of potential losses. By narrowing the scope of coverage, the insurer's liability is diminished, which often results in lower premiums for the policyholder.

Since the coverage is restricted to named perils, it allows businesses to tailor their insurance to fit their specific needs while also benefiting from cost savings. Thus, if a business opts for a named peril endorsement, it generally leads to a decrease in insurance costs compared to more comprehensive coverage options.