Business Owners Policy (BOP)
If you own a small to medium sized business, and are looking for insurance, you probably need a policy called a BOP. This policy offers all the coverage types you need in one policy. It even allows you to add extra features tailored to your business’ unique needs. These extra features are called endorsements. The BOP insurance policy has become the go-to coverage for businesses and consist of the following coverages:
General Liability provides protection against the risk of claims resulting from Bodily Injury and Property damage. This part of the policy also offers coverage for Medical Payments, Damages to rented premises and Products/Completed operations. Since the Liability coverage is packaged with physical damage coverage, the premiums are typically less than if the coverage was purchased separately.
The property section of a policy, offers coverage for buildings if owned by the policyholder and Business Personal Property as well. Business personal property is typically the business’ furniture, office equipment, inventory and other supplies. Spoilage coverage is also available for those businesses such as restaurants that have perishable products. The coverages can also include coverage for someone else’s property in the custody of the business.
The BOP also provides coverage against business interruption. This means that if your business is unable to operate because of damage resulting from a fire or windstorm, the insurance company will reimburse the business owner for loss of income while they relocate to a temporary location. This coverage usually provides a monthly reimbursement for a period of time selected when the policy is purchased.
Personal Injury Coverage
This part of the policy offers the insured coverage in the event they have liability arising from false arrest, libel, slander, defamation of character, wrongful eviction, and invasion of privacy.
Additional Insured Coverage
The Business Owners Policy can cover a mortgage company, customer or landlord. The policyholder can also add a lien-holder as additional insured for property that might be leased or financed.
For those businesses that serve alcohol, the policy can be endorsed to provide coverage for claims resulting from alcohol consumption.
Other Available Endorsements
Fire Department Service Charge – Provides reimbursement to the business owner when their responding fire department charges a fee for service.
Outdoor Signs – Most businesses will spend at least several hundred dollars up to thousands of dollars for outdoor signs. This endorsement provides coverage if the sign is damaged as a result of a storm, etc.
Data Breach – This endorsement provides coverage in the event that the business suffers from a data breach. It provides coverage to allow the business to meet the requirements in the jurisdiction they operate and take the necessary steps to inform impacted individuals that their data is safe going forward.
Salesperson Samples – Provides coverage for products for sample or display services off premise from the business location.
Equipment Breakdown – Provides coverage if equipment owned by the business such as air conditioning or heat breaks down.
The business owner policy can be endorsed with many more coverages that may be required by the business owner, which makes it the most comprehensive policy available. Many companies will insure home-based businesses with this policy. This policy is the typical selection for main-street business owners from small to mid-size businesses.