A Business Owner’s Insurance Policy, also known as a “BOP” combines all the major coverages needed by a business owner, namely property and general liability. It incorporates the basic coverages required by a business owner in one place, usually considerably less cost than the total cost of the coverages sold individually – ie a “Package”.
What does a Business Owner’s Policy cover?
A BOP generally protects business owners against property damage, peril, business interruption, and liability. While coverages vary between the different carriers, businesses can often opt-in for additional coverage, such as crime, spoilage of merchandise, forgery, fidelity, and more. Insurance providers determine if a business qualifies for a BOP based on business location, the size of the location, the class of business, and revenue. Also, a business may qualify for special considerations if it meets certain eligibility qualifications.
A business owner’s policy offers lots of insurance products rolled into one, usually aimed at small- and mid-size businesses. The policy typically includes property, business interruption, and liability insurance, but require businesses to meet certain eligibility criteria to qualify.
The property insurance portion is usually available as named-peril coverage, which provides coverage only for damage caused by certain events, which are listed in the policy (typically fire, explosion, wind damage, vandalism, smoke damage, etc.). Some BOPs offer open-peril or “all-risk” coverage. This option is available from the “special” BOP form rather than the “standard” type of BOP.
The property portion usually includes buildings (owned or rented, additions or additions in progress and outdoor fixtures). It will often cover any business-owned items or items owned by a third party but kept temporarily in the care, custody or control of the business or business owner. The business property must usually be stored or kept in qualifying proximity of business premises (such as within 100 feet of the premises).
Business Owner’s Insurance Policy -Additional Coverages
Business interruption insurance covers the loss of income resulting from a fire or other catastrophe that disrupts the operation of the business. It can also include the extra expense of operating out of a temporary location.
BOPs with liability protection will have the insurance company cover the insured’s legal responsibility for damages it may inflict on others. This damage would have to be a result of things done in the normal course of business operations, which may cause bodily injury or property damage due to defective products, faulty installations and errors in provided services.
A business owner policy might also include crime insurance, vehicle coverage, and flood insurance. Depending on a business’ individual situation, the business owner and the insurance company may make arrangements for additional coverage components. Some of these might include certain crimes, spoilage of merchandise, computer equipment, mechanical breakdown, forgery, and fidelity bond, but the coverage limits for these inclusions are typically low.
A BOP typically does not cover professional liability, worker’s compensation, health, or disability insurance. These items would require separate policies.
Eligibility
Eligibility requirements differ among providers. Insurance carriers may have requirements regarding business location, the size of the location, loss history, age of buildings, revenue, and class of business.
About Irving Weber Associates, Inc.
About Irving Weber Associates
At Irving Weber Associates, Inc., we work with agents and brokers to access quality programs for various commercial industries across the country. For more information, visit our Marketing Materials page. For a detailed look at how we can safeguard your insurance services with a custom-tailored package, please contact our specialists today at (800) 243-1811.