A business owners policy (BOP) is a type of commercial policy designed for small businesses. This policy helps combine coverage into a more affordable and convenient policy specifically for small businesses in low-risk industries. These
policies are flexible, but a basic BOP includes two main coverages: general liability and commercial property insurance. Each have specific incidents that they cover.
General Liability
General liability insurance covers basic and common claims against the business concerning:
- Bodily Injury: Bodily injury helps cover expenses if a third party is injured on your business’ property, such as medical bills. It can also protect your business against a related lawsuit.
- Property Damage:
- Personal and Advertising Injury: Personal and advertising injury covers claims regarding libel, slander, malicious persecution, copyright infringement, theft of an advertising idea and more.
Since BOPs are flexible, you can add other liability insurance coverages depending on your business’ needs, such as:
- Professional Liability: Professional liability insurance covers professional negligence that may cause a client to lose money. This insurance is also known as Errors and Omissions insurance (E&O insurance) and medical malpractice insurance.
- Umbrella Liability: Umbrella liability insurance fills in the gaps left by your other liability insurance policies. If your general liability policy reaches its limit for a claim, for example, umbrella liability insurance can help cover the remaining expenses.
- Directors and Officers Liability: Directors and officers insurance (D&O insurance) protects a business’ key employees in case of a claim regarding their activity as a director or officer. This includes claims of fraud, misrepresentation and more. This insurance often includes Employment Practices Liability (EPLI) which covers claims regarding discrimination, sexual harassment, wrongful firing or hiring, mismanagement of company benefits, etc.
Commercial Property Insurance
Commercial property insurance covers the physical assets of a business in case of damage or destruction caused by fire, wind, hail, lightning, smoke, explosions, theft, vandalism and more. This insurance can cover the physical location (such as an office building or restaurant) and its contents such as equipment, furniture and decorations.
Commercial property insurance may often include Business Interruption insurance, which helps cover lost income if the business is unable to operate fully due to a disaster or government mandate.
Purchasing these two coverages in a BOP can help save you money rather than purchasing each coverage separately, but these insurance policies are not necessarily all that you need.
Every business is different. Speak with an insurance agent about protecting your small business with a BOP today.
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