What Is A Business Owners Policy Anyway?
A mistake that small business owners make when buying business insurance is to strictly rely on their general liability insurance, which does cover their losses and those of their clients but does not provide the full spectrum of protection for your property. Policy management by a business owner must adequately account for risks to the establishment as well as those of the company. This is where a more robust form of protection comes in called a business owners policy (BOP), which covers your physical property and puts you at ease knowing you are protected in case of an unfortunate disaster.
Eligibility for a BOP requires that a business have fewer than 100 employees, needs no more than 12 months of business interruption insurance, and earns no more than $1 million to $5 million in revenue a year, depending upon your insurance provider’s limitations.
What is a BOP and Why Get One?
A BOP is a combined set of coverages that comes in a bundled package. Merging these packages into one BOP entity will save a business owner money over paying the sum of the coverages individually. Often offered with this bundle is something called business interruption insurance. What this does is compensate for the lost income profits of up to a year in the event of a property loss.
Since this policy is geared specifically towards small and mid-sized business, it becomes incumbent upon you to insure yourself against unforeseeable disasters outside of human control that can wreak havoc on your company effectively putting an abrupt halt to all your business efforts. Unsightly occurrences such as theft, accidental damage, wind damage, and fire are typical claims covered by this policy.
Coverages Combine into a Policy of Three
BOP design allows for three main coverages to be conveniently combined into one policy. These include:
- General Liability – Covers claims and expenses as a result of negligence which include personal injury and property damage.
- Property – Provides protection for the physical structure of your company, inventory, and equipment in the event of a mishap.
- Business Interruption – Protects lost profit in case your business is forced to cease operations. A temporary relocation workspace and supplies can be reimbursed as well as the wages for your staff.
Every business is unique so make sure to speak to an insurance professional who knows your industry and can tailor the different coverage nuances that come with a BOP and align them to your specific needs. In addition to the three main coverages you can also include:
- Terrorism Insurance
- Commercial Vehicle Insurance
- Workers Compensation
- Umbrella Insurance
- Professional Liability Insurance
- Data Breach Insurance
- Bailee’s Coverage
- Accounts Receivable Insurance
- Commercial General Liability Insurance
What a BOP Does Not Cover
A BOP will not protect you from the professional services you provide. Examples of this are:
- Claims that arise from professional services your business performs.
- Damages to the client if you provide inaccurate or incomplete advice.
- Earthquake and flood are often excluded from coverage, but ask your provider to make sure.
If you need a business owner’s policies give Tatum Insurance a call. We have locations in the following cities: