What Does A Businessowners
Policy (BOP) Cover?

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What does a businessowners policy (BOP) cover? A business owner's policy combines important insurance coverages like commercial property, general liability and business income in one packaged policy.

What Does A Businessowners Policy (BOP) Cover?

If you're thinking about starting your own business, there are a lot of things you are going to need to get into place in order to set yourself up for success. Of all these things, insurance is one of the most important.

Commercial insurance protects your business from the various risks that exist. There are several types of policies available. Of these options, commercial liability and commercial property insurance are the most important.

Instead of carrying individual policies for each of these types of coverages, you might want to consider a Businessowners Policy, which combines both commercial liability and commercial property insurance into one policy. But what does a businessowners policy (BOP) cover?

What Benefits Does A Businessowners Policy Offer?

For many small business owners, a BOP is an easy and convenient option. Since it combines different types of coverages, such as commercial liability and commercial property insurance (two coverages that most businesses are generally required to carry), as well as other coverage options into one policy, it really simplifies your business insurance needs. What does a businessowners policy (BOP) cover?

You won't have to deal with the hassle of finding and maintaining separate policies. Plus, it can be a much more affordable.

Business Owners Policy Explained

Business Owners Insurance Package Policy

A Businessowners Policy (often simply referred to as a BOP), is an insurance policy that combines commercial property and commercial liability insurance coverage into a single policy. It safeguards your business from various risks, such as theft, fire, third party bodily injuries, advertising injuries, and other types of disasters that could impact the operations of your organization.

This type of policy can also be customized to meet the specific needs of your business by including coverages that are considered optional, such as business income, data breach, and accounts receivable coverage.

General Liability Insurance. In regard to liability coverage, the broader it is the better. The general liability insurance a business owner's policy offers covers a business should it be sued for damaging someone else's property or for causing harm to another person. It also assists with the cost of legal fees that you may incur.

Commercial Property Insurance. A business owner's policy can also protect your business' property, whether that property is owned, rented or leased. It covers various things, such as the building, the furniture, the inventory, the equipment, and the fixtures within the business. There are two different forms of commercial property coverage in a BOP; standard and special (which provides more comprehensive coverage). It also offers coverage should any accounts receivable and important documents be lost.

Business income insurance. Should some unforeseen circumstance arise that will that cause the operations of your business to be suspended, the business income insurance offered in a BOP can help to replace your lost income in order to assist you with meeting any financial obligations you may have that cannot be put off, such as paying your employees or your rent. It can also include the extra expenses of operating out of a temporary location.

As mentioned, you can add other coverage to a BOP to ensure your business has the protection that it needed. Following are some additional coverage options that businesses often opt to add to a business owners policy:

Blanket Additional Insured
Building & Business Personal Property
Business Income and Extra Expense
Data Breach
Electronic Data and Equipment
Employment Practices Liability
Identity Theft
Limited Property of Others Liability
Personal Property of Other
Valuable Papers and Records

What Business Owners Policy Doesn't Cover

BOPs typically do not cover:

Amounts beyond the policy limits and property value.
Commercial auto insurance
Disability insurance
Employee injuries - CGL only covers non-employee bodily injuries. You will need workers compensation to cover employee injuries
Employment disputes - Employment Practices Liability Insurance (EPLI), not general liability, covers lawsuits if an employee sues over harassment, wrongful termination, discrimination, and similar issues.
Health insurance
Intentionally damage caused by the business owner or employees
Personal belongings that may be used by the business.
Professional mistakes - Only professional liability insurance (E&O) can cover lawsuits due to negligence and professional mistakes.
Property damage resulting from employee errors.
Property that was not purchased for business use

So what does a businessowners policy (BOP) cover? When determining which type of coverages you should include in your policy, consider the specific types of risks that are associated with your business. Also, keep in mind that some types of coverages aren't permitted with a BOP policy, such as commercial auto and worker's compensation insurance.

Who Should Consider a Businessowners Policy?

If any of the following apply to your business, a BOP could be in your best interest:

You operate your business out of a physical location, such as a leased office space, a store, or even your home.
There's a chance that you could be sued for various things, such as a client slipping and falling, or if someone could claim that you caused an advertising injury.
There are assets associated with your business that could be either damaged or stolen and disrupt the operations of your business, such as equipment, machinery, inventory, furniture, or even data.

How Much Does A Business Owners Policy Cost?

How much does a business owners policy cost? The premiums vary depending on the amount of risk exposure, and it depends on the endorsements and deductible selected. Following are some of the main factors that go into the price of a policy:

Type of business (contracting, service, retail etc.)
Business location
Years in business
Business experience
Annual payroll
Annual revenue
History of claims
How much property you want to cover

Which Type of Coverage Options Do You Need?

In addition to the commercial property and commercial general liability coverage that is offered under a BOP, you might want to consider adding in additional coverage options. To determine which coverages would be the most beneficial for you, consider the specific needs of your business. Also, keep in mind that not all coverage options can be added to a BOP. To determine your best options and find out what types of coverages can be added to a BOP, speak to an broker that specializes in Businessowners Policy insurance.

What Does A Businessowners Policy (BOP) Cover? - The Bottom Line

We hope this article on What does a businessowners policy (BOP) cover? has been informative. There are a lot of risks that are associated with operating a small business. To protect your business and yourself, it's important to carry the right type of insurance. A BOP can help to simplify your insurance needs and even make them more affordable.

Understanding The ISO Businessowners Coverage Form

Businessowners Coverage Form

You need coverage for all of your property and casualty exposures, not just some. Wouldn't it be great if you could get most or all of them in just one coverage form? It is possible...

If you qualify, the Insurance Services Office (ISO) Businessowners Coverage Form may be exactly what you're looking for.

This single package covers your buildings and business personal property, as well as liability imposed on you because of your premises, operations and products. In addition, it has numerous coverage extensions and optional coverages available.

Consult the policy for definitions and limitations. The information below does not represent contract terms. The policy is subject to company underwriting practices.

COVERED BUILDING PROPERTY

Buildings can be more than just a single building. The structure listed and described that has a limit of insurance on the declarations is covered, along with the following:

Completed additions
Indoor and outdoor fixtures
Permanently installed machinery and equipment
Personal property you own used to service or maintain the building or premises
Personal property you own as a landlord in furnished apartments
Additions under construction if not covered elsewhere

COVERED BUSINESS PERSONAL PROPERTY

Business personal property is more than just the contents of a building. The following business personal property is covered when a limit of insurance appears on the declarations and when it is in the described building and within 100 feet of the premises or building while in the open or in or on a vehicle:

Personal property you own and use in the business
Property of others in your care, custody, or control
The use interest in any improvements and betterments you made or acquired if you are a tenant
Leased personal property you are contractually responsible to insure
Exterior building glass you must cover if you are a tenant

PROPERTY NOT COVERED

The following property is excluded. In some cases, it can be covered under other coverage forms or policies:

Aircraft and any motor vehicle subject to motor vehicle registration laws
Money and securities
Contraband, illegal property, or legal property in the course of illegal transportation or trade
Land, water, growing crops, or lawns, except lawns that are part of vegetated roofs
Certain outdoor property, such as fences, signs not attached to buildings, towers, antennas, and plantings
Watercraft and its equipment while afloat
Accounts, bills, currency, food stamps, evidences of debt, accounts receivable, and valuable papers and records
Computers permanently installed in aircraft, watercraft, or vehicles subject to motor vehicle registration laws
Electronic data
Animals

COVERED CAUSES OF LOSS

Coverage applies to direct physical loss, unless the loss is subject to a limitation or is excluded. Exclusions and limitations can significantly affect the coverage provided and should be reviewed carefully.

ADDITIONAL COVERAGES

These additional coverages apply for specific limits of insurance and are subject to certain exclusions, exceptions, conditions, and restrictions:

Debris removal
Preservation of property
Fire department service charge
Collapse
Water, other liquids, powder, and molten material damage
Business income for 12 months on an actual loss sustained basis
Extended business income for 30 days after normal operations resume
Extra expense for 12 months on an actual loss sustained basis
Pollutant cleanup and removal
Civil authority
Business income and extra expense due to acts of civil authorities
Money orders and counterfeit money
Forgery or alteration
Increased cost of construction
Business income from dependent properties
Glass expenses
Fire extinguisher systems recharge
Electronic data
Interruption of computer operations
Limited coverage for fungi, wet rot, or dry rot

COVERAGE EXTENSIONS

These coverage extensions are for additional amounts of insurance:

Newly acquired or constructed buildings
Newly acquired business personal property
Personal property off premises
Outdoor property
Personal effects
Valuable papers and records
Accounts receivable
Business personal property temporarily in portable storage units

OPTIONAL COVERAGES

Outdoor signs
Money and securities
Employee dishonesty
Equipment breakdown protection for boilers and mechanical/electrical equipment

PROPERTY LOSS CONDITIONS

Loss Conditions explain the obligations you owe the insurance company and the ones it owes you when a covered loss occurs:

You may not abandon damaged property to the insurance company without its consent
Appraisal explains how disputed claim amounts are resolved
Your duties if loss or damage occurs
Legal action you can take against the insurance company
How loss payments are handled
How recovered property is handled
Resuming operations
How vacancy affects you

BUSINESS LIABILITY COVERAGE

The Businessowners Coverage Form insures bodily injury and property damage liability and the legal obligations that arise from an occurrence. It also covers lawsuits and their associated costs. The limits of insurance selected should be high enough to handle serious claims. This coverage is subject to a number of exclusions.
It also covers personal and advertising injury liability and related legal obligations arising from an offense as well as lawsuits and their related costs. The limits of insurance selected should be high enough to handle serious injuries and the injured party's loss of earnings. This coverage is also subject to a number of exclusions.
Medical expenses coverage applies to medical expenses of individuals injured on your premises or due to your operations, without regard to fault. This coverage is subject to a number of separate exclusions.

EXCLUSIONS

Every insurance coverage form or policy has exclusions and limitations. This is because only specific types of businesses need the coverage or the exposure to loss is such that it is not considered insurable. They can significantly affect coverage and should be reviewed carefully.

ENDORSEMENTS

The Businessowners Coverage Form provides very broad coverage. Many endorsements are available to use with it that broaden, limit, or exclude coverage.