Business Owner’s
Policy Insurance
(BOP) : How To Get The Right Coverage
and Save on Business Liability Insurance Costs
A business owner policy provides comprehensive coverage for various risks that may arise from claims and lawsuits. It safeguards the tangible assets of your business, including inventory, equipment, and the building itself. This policy offers protection against incidents such as fire, theft, vandalism, and bodily injury.
What Is a Business Owners Policy?
Business Owners Policy (BOP), takes the guesswork out of purchasing the right package of insurance coverages for your business.
A BOP bundles several types of coverage in one package, similar to how a homeowners policy works but is designed for small and mid-sized businesses.
Most business owner’s insurance policies combine the following types of coverage in one convenient bundle:
Commercial General liability coverage (protection from claims of property damage or bodily injury)
- Property Insurance (to protect physical assets)
- Insurance for several other types of loss, including lost income, advertising damage, and more
As well as dozens of other insurance coverages that cover common exposures for small and mid-sized businesses.
General Liability Insurance
for Less with a Business Owners Policy
A BOP’s General Liability Insurance (sometimes called Commercial General Liability Insurance) protects you from the cost of defending yourself or paying the damages if an employee, contractor, customer, or other business-related third party claims that your business caused them bodily injury or harmed their property.
Your BOP may also offer a variety of other types of coverage, including Personal and Advertising Liability, Completed Operations Liability, Contract Liability, and Liquor Liability.
Property Liability Insurance for Less with a Business Owners Policy
The BOP’s Property Insurance typically insures damaged or lost property for its replacement value. This means that your reimbursement would cover the cost of replacing the property, without any deduction for depreciation based on the age of the property. It also acknowledges that your business might be held legally responsible for damage to someone else’s property while it is in your possession. When your customer’s property is in your “care, custody, or control,” it is normally covered as if it were your property.
Business Interruption Coverage for Less with a Business Owners Policy
Depending on its terms, your BOP might cover income you lose or expenses you incur as a direct result of a property loss covered by the policy. For instance, if you’re forced to close shop and move to a new office because of a fire, you may be eligible for reimbursement on the revenue you lose during the time you can’t conduct business in addition to reimbursement for moving costs.
Additional Liability Insurance with a Business Owners Policy
Business owners interested in increasing their insurance coverage limits can buy additional coverage to supplement their Business Owners Policy. Known as Business Umbrella Insurance, this type of coverage may make a BOP even more effective.
Qualifying for a Business Owner’s Policy
In order to qualify for the discount business insurance a Business Owner’s Policy offers, your business must meet certain criteria. Generally speaking, a business does not qualify for a BOP if it…
- Is involved in highly specialized or high-risk operations
- Occupies large premises
- Needs business interruption coverage lasting longer than 12 months
- Needs higher limits of liability than a Business Owners Policypackage offers
While a Business Owners Policycan help many businesses save money, it generally isn’t a good fit for businesses with higher liability risks. For high-risk companies, the coverage limits offered by a standard BOP are usually insufficient. Even if a Business Owners Policyis a good fit for your business, keep in mind that not all BOPs offer uniform coverage; be sure to check with your agent whether your BOP meets your business’s needs.
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Business Owner’s Insurance Policy
Although a BOP is a convenient insurance option for small to midsized business owners, it does not cover professional liability, commercial auto insurance, and workers’ compensation.
Comprehensive cyber liability insurance is also excluded from most business owners’ insurance policies.
Here are a few examples of insurance coverages that can be added to a BOP:
- Crime coverage—Although it is minimal, crime coverage can be added to a BOP to cover losses as a result of crime, such as employee dishonesty and computer fraud. Typical crime coverage ranges between $1,000 and $5,000.
- Data breach coverage—This coverage is commonly added to BOPs to help remedy the following losses resulting from data breaches:
- Notifying impacted individuals
- Hiring crisis communication consultants
- Defense and settlement costs from associated lawsuits
- Replacement of lost income
- Extortion and ransom payments
- Errors and omissions (E&O) coverage—Businesses that provide services for a fee can be sued by customers who claim that they were harmed because the business failed to perform its job properly. E&O coverage pays for any judgment for which the insured is found legally liable, up to the policy limit. It also covers legal defense costs.
Who Should Purchase A Business Owner’s Policy?
Businesses that have the following characteristics are ideal candidates for a BOP:
- Operate in a physical location, whether home-based or outside the home
- Have assets that can be stolen, including products, cash, furniture, and digital property
- Are at high risk of lawsuits
- Employ less than 100 employees and have less $5 million in sales
The following types of businesses frequently purchase BOPs to protect from losses not covered by general liability insurance:
- Manufacturers
- Religious organizations
- Apartments
- Restaurants
- Technology consultants and solutions providers
- Wholesalers
- Retailers
Benefits Of Business Owner’s Policy
As a business owner, there is no shortage of things that you need to manage on a daily basis. Whether it’s supervising employees, connecting with new clients or anything in between, there is only so much time in the day. That being said, it’s nice to have the peace of mind that you and your business are covered in the event that an insurance claim is brought against you.
A business owners policy (BOP) is a good option for small and midsized businesses, and it can offer you plenty of advantages, including:
Broad coverage—BOPs cast a wide net of protection by bundling a number of different types of coverage into one plan. In general, BOPs provide commercial property, general liability, and business interruption coverage in one policy.
Cost savings—Every dollar counts for small and midsized businesses, and BOPs can provide cost savings by combining the aforementioned policies so that you don’t have to go out and purchase each one separately.
Coverage for medical expenses—CGL policies will provide protection for your company if a nonemployee is injured on your premises or in an incident related to your operations. Coverage for medical payments can be triggered without legal action and allows for smaller medical claims to be settled quickly and without litigation.
Customization—While BOPs cover multiple types of risk for your business, you don’t need to worry about buying something that you don’t need. These policies can be tailored to fit your business’s needs with additional coverage for risks such as cyber liability, equipment breakdown, personal and advertising injury, and more.
How To Get The Right Business Owners’ Policy
A business owner’s policy in most cases is going to be less expensive than purchasing a package policy of the same coverages.
Purchasing a BOP will also make sure that any specific or particular coverages to that industry or line of business, say a legal firm versus a pizzeria versus a nail salon, are included specific to that industry.
So if you’re looking for a business owner’s insurance policy, there are two keys:
- You want to make sure that you have the right carrier, a carrier that understands what you’re doing, and,
- You want to make sure that your business owner’s policy is configured to your particular industry.
Here’s an example, let’s say Chubb has a tremendous program for restaurants. You want to make sure that you get a BOP or business owner’s policy for our restaurant through Chubb. Now, you’re going to get a great product at a great price.
To discover whether a BOP is an option for your business, complete this short application. We usually respond via email within 24 hours. If you’d like to discuss your options sooner, feel free to call us at (888)-540-7374.
