Business Owners Policy simplifies coverage needs by combining two policies that most businesses need - business liability and business property:
Business Liability: The coverage for business liability under BOP is the same as General Liability Insurance. This covers claims including consumer injury, advertising harm, and product liability.
Business Property: This covers the structure of your commercial property as well as your business’ property, including mobile items used for business purposes. Business property under BOP can also pay for things like debris removal, lost income, and environmental cleaning.
Example: A pipe bursts in your store and your inventory is ruined. Under a BOP, you would be covered. Property Insurance can also cover your landscaping, your outdoor signage, your furniture and equipment, your building itself and others’ property.
Example: A customer slips and is injured in your store, and they sue you for bodily injury. Your Business Owners Policy covers your legal defense costs.
Example: You suspend your operations due to fire damage. Business interruption insurance, included in most BOPs, would cover your income for up to 12 months. You'll also be covered for rent payments and employee payroll. It would also cover the costs of relocation and new advertising.
Example: Your commercial property is broken into at night. The theives steal computers and leave behind damage to the doors and windows from a forced entry. BOP covers the stolen items and the property damage.
Example: Your advertising or marketing materials paint a competitor in a bad light. The competitor sues you for libel or slander. BOP will cover court costs, lawyers fees and any awards for damages.
Purchasing a policy bundle is typically more affordable than purchasing General Liability and Property Insurance separately. Most providers will offer a discount of 15 to 20 percent.
The premium for a BOP will be determined based on a number of factors, including your business’s location, risk factors, number of employees and size. Premiums can range anywhere from $500 to $15,000.
A business owners insurance policy is designed for small businesses. It is a one-stop-shop kind of policy and for certain medium and large businesses this may not be good because you cannot tailor the coverage to your needs. If you are a manufacturer you should read your coverage carefullly and more often than not, get a General Liabiltiy policy.
The type of business you own and operate will dictate whether or not certain insurance policies are required by law. While a BOP is not required by law, sometimes General Liability is. Since the BOP is comprised of General Liability and Property it may be the best option for you as far as coverage and price go. Additionally, some professional services like therapists and consultants can be required to purchase Errors and Omissions insurance.
As always, it is important to not only read your policy but to check with an experienced advisor to make sure you have the best policy for your needs. Most BOP’s will be able to provide coverage for independent contractors but that does not mean all of them will. All insurance policies are not created equal.
You can combine different entities as a named insured on your policy if certain requirements are met. This usually includes having similar ownership and similar operations. It is important you check with an advisor as it almost always requires underwriter approval from the insurance company.
If you have the unfortunate need to report a claim you can simply consult with a CoverWalllet advisor to get the process started. We will walk you through the process and save you from all the hassel.
Not every business is eligible for a BOP. Eligibility requirements vary among insurance providers. Here’s a general overview of what is considered when determining eligibility:
Business and Employees Your business and all employees will be covered for claims that arise claiming bodily injury or property damage to a third party caused by the business. Additionally, your business property will be covered, so you can replace it should a covered event happen.
Parties to a Contract If you enter into a contract for work and a party asks to be listed as additional insured on your policy you can do that here, that way if a claim arises out of your work, they will come to your policy first.
Suppliers If you sell products or rent a piece of equipment, it is likely that the supplier will ask for you to indemnify them if a claim results with that product or the equipment is damaged.
The limits of a BOP will vary according to the General Liability and Property Insurance policies in your bundle. Business Interruption Insurance typically provides up to 12 months-worth of income for businesses when they are forced to suspend operations due to a covered event. Additionally, you should always read the wording of your policy carefully.
Standard policies only provide compensation for damages caused by events specifically listed, such as a fire, smoke damage or vandalism. Your policy may also list certain items as “property not covered” under Property Insurance. However, if you’d like more protection, you can purchase a “special” policy that offers open-peril coverage.
General Liability insurance is there to provide protection against those third parties should they get hurt and develop a bodily injury. It also covers third party property damage and advertising liability, such as slander or libel. With the internet and social media, these things have a way of happening even if you don't mean for it to occur.
Business Owner's policy or BOP includes General Liability insurance, but also includes some property coverages such as building and business personal property. A BOP is an affordable and easy way to cover your small business for these critical risks. In addition, you can add coverage for business interruption, so that if a covered claim does occur, you can keep your business running while it is repaired. Read more about the difference between BOP and GL.
Property coverage is provided on an open peril (special form) basis in the unendorsed BOP. An endorsement can be added to offer coverage for a specific danger.
Just like your personal auto policy, Commercial Auto Insurance, covers liability, collision, and medical payments should an accident occur with your commercial vehicle. Your personal auto policy will not cover damages while the vehicle is being used for business purposes.
Umbrella Liability can be a great solution for a business that needs more liability coverage than what is offered in their General Liability, Employer’s Liability or Auto Liability Plan. Umbrella coverage can be purchased as a standalone policy or can be bundled with a General Liability policy.
This insurance provides a business with protection should a mistake have been made while delivering professional services. Your General Liability policy will not provide you with this level of protection, so if your company gives advice or provides contracting services you may need this insurance.
The directors and officers of a privately-held company are at risk from suits by a variety of different people, such as customers, competitors, suppliers and government agencies. However, the greatest number of lawsuits against D&O come from the employees of a company itself. D&O Insurance covers your management team, should things go south.
EPLI is a liability insurance that covers wrongful acts, such as wrongful termination, discrimination, sexual harassment and retaliation. This insurance may also protect your business from other employee-related claims, such as deprivation of a career opportunity, defamation, invasion of privacy, failure to promote, and negligent evaluation.
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