Business Owners Policies (BOP) essentially combine Property and General Liability coverage into a single insurance policy.
Small businesses that own commercial property should consider a BOP. The Commercial Property insurance coverage will protect your building and business personal property while the General Liability portion will protect you from lawsuits and accidents.
BOPs generally make sense for small businesses based outside the home or businesses with equipment and property to protect. If you’ve made investments into expensive equipment, you’ll want to ensure it’s covered in case something unexpected happens.
A Business Owners Policy will also provide business income coverage. If you have to shut down unexpectedly, a BOP will help pay bills and payroll during your temporary closure.
Common Business Owners Policy Questions:
Do I need a Business Owners Policy?
If you own a building for business purposes, have significant business property, or are at risk of being sued for accidents or harm, you need a BOP. You should also strongly consider a BOP if you or your business would not be able to withstand a loss of income when a Property loss occurs.
What types of businesses need a Business Owners Policy?
Most businesses would benefit from the coverage provided by a BOP. In general, small-to-medium businesses should consider purchasing a BOP who have Business Personal Property, inventory, equipment, or, have either invested in tenant improvements or own their building.
Do I need a Business Owners Policy if I work from home?
You may. If you have sizable business assets or store business property off-premises, a BOP provides coverage in the event something happens to your business property. A BOP also protects you from claims of bodily injury if customers or clients visit your property and get hurt, and claims of reputational harm if you’re accused of libel, slander, or copyright infringement. Additionally, BOPs provide income replacement in the event you cease operations, reduce capacity, or need help keeping your business running.
Do I need Professional Liability insurance with a Business Owners Policy?
By default, a BOP policy doesn’t include protection against Professional Liability claims for financial or economic damages from bad advice or omissions in your work. However, you may add Professional Liability protection through an optional endorsement, or rider, to your BOP.
Why is a Business Owners Policy considered versatile?
BOPs may be enhanced and custom-tailored to fit your exact needs through optional riders or policy endorsements. Endorsements may add coverage fo water backup, Liquor Legal Liability, Hired/Non-owned Auto Liability and other threats specific to your business and industry.
I don’t own property. Do I still need a BOP?
If you’re renting or leasing property, you may opt to forego the business property component of a BOP, while still enjoying the other protections afforded by the policy, such as protection for your business personal property.