One important item in building and running a business is business insurance. The type of insurance you buy and the issues it covers run the gamut of issues. Coverage might protect minor slip and fall accidents to answering a libel charge for a derogatory statement your company published.
One method of insurance buying is to buy individual policies for each type of risk. So, your insurance portfolio might have a commercial auto insurance policy, a policy for personal injury on company premises, workers' compensation insurance and more. The number of spreadsheets needed to track your policies is staggering. Wouldn’t it be nice to have only one business policy to worry about that covers all risks? There is such a policy designed for small and medium-sized business. It is a Business Owners Policy (BOP).
What Does a Business Owners Policy (BOP) Cover?
A typical BOP covers most liability risks and property insurance in a single package. By bundling the policies, businesses save premium dollars. The coverage provided in a BOP varies by company but includes:
There are two types of property insurance available with a BOP. The first is as named-peril coverage. Named peril coverage is insurance that covers you only for risks named in the policy. Typically, this includes:
- Wind damage
- Smoke damage
Some insurance companies issue an “all-risk” policy. It covers all risks related to property except for those exclusions listed in the policy. Property covered by a BOP usually includes:
- Owned or rented buildings
- Additions in progress
- Outdoor fixtures
Business Interruption Insurance
If you have a loss of income due to a covered event, BOP insurance company covers the loss. Policies may also cover expenses of running the business from a temporary location. This often includes utility costs and employee salaries.
This insurance covers your company if there is a legal liability the company may cause to others. This coverage includes acts of omission and acts of commission by you and your employees that the injured claims caused them harm.
One of the advantages of BOP coverage is that it is customizable. You buy a base BOP and then you can add additional business insurance coverage by buying endorsements such as protection against certain crimes, spoilage of goods, commercial vehicle coverage.
BOP insurance usually does not cover, professional liability insurance, workers' compensation, and employee health and disability insurance. These risks need their own policies. Therefore, a BOP might not be appropriate for you. Talk to your insurance agent about your specific business needs. They can help you determine if a BOP is right for you.