What does a business owners policy (BOP) cover? (2024)
Insurance companies selling business insurance offer policies that combine protection from all major property and liability risks in one package. (They also sell coverages separately.) One package purchased by small and mid-sized businesses is the businessowners policy (BOP). Package policies are created for businesses that generally face the same kind and degree of risk. Larger companies might purchase a commercial package policy or customize their policies to meet the special risks they face.
BOPs include
Property insurance for buildings and contents owned by the company -- there are two different forms, standard and special, which provides more comprehensive coverage.
Business interruption insurance, which 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.
Liability protection, which covers your company's legal responsibility for the harm it may cause to others. This harm is a result of things that you and your employees do or fail to do in your business operations that may cause bodily injury or property damage due to defective products, faulty installations and errors in services provided.
BOPs do NOT cover professional liability, auto insurance, worker’s compensation or health and disability insurance. You'll need separate insurance policies to cover professional services, vehicles and your employees.
A Business Owner's Policy (BOP) combines business property and business liability insurance into one business insurance
business insurance
What Is Business Income Insurance Coverage? Business income insurance coverage is a type of business insurance that helps your company replace lost income if it's unable to operate due to covered property damage. Business income insurance acts as business interruption insurance or income protection insurance.
A BOP typically protects business owners against property damage, peril, business interruption, and liability. While coverages vary among insurance providers, businesses can often opt in for additional coverage, such as crime, spoilage of merchandise, forgery, fidelity, and more.
BOPs do NOT cover professional liability, auto insurance, worker's compensation or health and disability insurance. You'll need separate insurance policies to cover professional services, vehicles and your employees.
The business liability insurance covers the insured's legal liability for damages because of bodily injury or property damage, and it also covers personal injury and advertising injury.
The coverage area for commercial property insurance would be the state or U.S. territory where your business resides. The properties listed on your property insurance policy are the ones receiving this coverage. If your business owns properties in another state, you might need a separate policy to cover them.
Business interruption does not typically cover damages or losses from flooding, earthquakes, and mudslides, although consumers can purchase additional coverages for these specific perils. Exclusions from coverage include losses unrelated to property damage, such as lost revenues due to viral outbreaks or pandemics.
What Is Business Owner's Policy Insurance? A Business Owner's Policy (BOP) combines business property and business liability insurance into one business insurance policy. BOP insurance helps cover your business from claims resulting from things like fire, theft or other covered disasters.
A BOP is appropriate for any business that has employees or physical property. The exception is a home-based business, which may sometimes be covered under your home or renters policy. You should check the terms of your home/renters policy to see what is and is not covered.
It bundles general liability with coverage for your business's physical assets, such as your building or the space you lease, equipment, and inventory. Plus, if an unexpected event forces you to pause operations, a BOP can help replace lost income to keep your business afloat.
General liability coverage includes bodily injury, damage to a customer's property, and advertising claims only. BOP includes general liability—plus property insurance for your business and equipment and business interruption coverage.
Which of the following is not eligible for coverage under a Businessowners Policy? Businesses operating in the sale, servicing, or storage of automobiles are not eligible for a Businessowners Policy.
Fire, burglary, liability and business interruption losses are all covered under a BOP. Since a BOP is prepackaged, there is only one policy to review and it can be more cost effective than purchasing separate policies. Additional coverage can be added in the form of endorsem*nts or riders.
General liability insurance is included in a business owner's policy (BOP), a cost-saving bundle designed for low-risk businesses. General liability covers bodily injuries, damage to a customer's property, and advertising injuries. A BOP provides the same coverage, along with commercial property insurance.
You may also add on additional coverages to this business insurance, such as Business Interruption and Equipment Breakdown, employee crime, money and securities, and specialty equipment. Special liability risks you face, such as food-borne illness, product recall, liquor liability, and others, will also be addressed.
Commercial package policies can't include certain items like workers' compensation or directors-and-officers insurance. Workers' compensation insurance is required by law and must be purchased as a separate policy. Directors-and-officers policies are necessary for non-profit organizations.
What is Business Personal Property? Business personal property (BPP) insurance covers the equipment, furniture, fixtures and inventory that you own, use or rent inside your workspace. Basically, it covers almost everything except the building itself.
Equipment breakdown insurance covers damages caused by covered internal forces, such as power surges, electrical shorts, mechanical breakdowns, motor burnout or operator error. Keep in mind that even though equipment breakdown insurance covers computers, it does not cover software.
Fire, burglary, liability and business interruption losses are all covered under a BOP. Since a BOP is prepackaged, there is only one policy to review and it can be more cost effective than purchasing separate policies. Additional coverage can be added in the form of endorsem*nts or riders.
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