Ending up with the wrong policy is often not even known until you need to file a claim, and then your business is having a whole different problem when the policy doesn’t cover what you thought it did. Thankfully, there’s a better way to choose what’s right for your business and learning about the coverages of a BOP vs commercial package policy is a good place to start.
BOPs are usually for small businesses and are restrictive of the type of business and square footage of the work place. Some example businesses that do well with a BOP include office buildings, buildings used for services, wholesalers, contractors, and apartment buildings. Usually, the cutoff for a BOP is about 25,000 square feet, but this varies depending on the insurance company. They do allow for multiple locations, but many of these are still restricted to less than 25,000 square feet.
A BOP covers business personal property. This can include the business building, the assets inside, and also loss of income when disasters happen and financial obligations are still required. It can also help if a customer or other third party decides to sue the business because of personal harm. A BOP insurance policy covers the cost of the defense, which could save the business thousands of dollars.
However, BOPs do not cover everything that businesses usually need covered. There is no health insurance, disability insurance, or even worker’s compensation, so those are separate policies the business owner needs to add or purchase separately. While it covers broad damage, it needs additional policies to make up for where it lacks.
BOP vs commercial package policy – a commercial package policy (CPP), is a much more flexible policy that allows for more coverage to be added and packaged according to your business’s needs. A CPP is perfect for those who are a larger company and need more protection than a business owners policy can offer. While BOPs are usually fairly cut and dry, CPPs can be designed to fit exactly what your business needs.
Many choose to include property and liability, theft, and professional liability in their CPPs. However, there are also options to add business income insurance, commercial umbrella liability, electronic data processing coverage, equipment breakdown coverage, vehicle insurance, employment liability, inland marine, and pollution liability.
Getting a CPP is usually cheaper than buying all the separate policies. It can lower your deductibles and provide you with more coverage than your past policy, all for a similar price. Unfortunately, there are still some items that a CPP do not include. While they offer a much more specialized package than a BOP vs commercial package policy, they still do not include health insurance, worker’s compensation, disability insurance, life insurance, and D&O liability.
We hope this article on BOP vs commercial package policy has been informative. When trying to decide between a BOP and a CPP, look at what your business is going to need right now and in the future. For those businesses that are just starting out, a BOP might be the best option. They are fairly affordable, and the basic coverage is enough to get your business protected from harm and disaster.
The limitations of a BOP aren’t usually noticed until the company is expanding. For a business that is growing at a quick rate, a CPP might be the best choice. Being able to customize the insurance policy is certainly an advantage with a CPP, and it can provide more protection for a larger company. Ultimately, the choice is up to the business owner. Talking to someone who knows about business insurance can help clarify and explain what option is best for your company.
