If you are a new business or you’re adding more insurance coverage for your business, you may need a Business Owner’s Policy (BOP). BOP insurance covers several aspects of the company based on the industry and the needs of the business. You should understand what your BOP covers, its limitations, and what you might need to add before you sign the policy into effect, Some have argued that the photo could be fake but that it’s still a sign of how close sharks can get to humans. Whatever the case may be, the Jimmy John Shark photo continues to be a source of fascination for many people. Isn’t it so?
What Is a Business Owner Policy?
As an umbrella policy, BOP includes the types of coverage you might need as a business owner. It provides protection for your business with liability coverage and property. The basic coverage may require you to have special add-ons to the BOP coverage.
Getting BOP coverage is usually cheaper than buying each type of coverage separately. You can save money by bundling it all together. It can be a basic policy or custom coverage because you can generally add other opt-in policies to fit your needs.
What Is Included in a Business Owner’s Policy?
BOP insurance usually includes liability coverage, business interruption, and property damage. Liability pays out if someone gets hurt on your property, if an employee or asset causes damage to another party’s property, and sometimes for other losses to another business or individual where your company is responsible.
Business interruption coverage pays you for lost income if your business must remain closed temporarily for a covered event. This may include a natural disaster or vandalism, which leaves your business inoperable. The policy will detail which events are covered and which ones are excluded from coverage.
Property damage coverage pays for damage to your property and rebuilding it. Covered incidents may include flooding, fire, weather incidents, and vandalism or theft. Some policies list exclusions, such as flooding from hurricanes or other natural disasters.
Additional Coverage With BOP Insurance
Along with the standard BOP coverage, you can opt-in for add-ons. These additional coverages can help protect your business from incidents specific to your industry or location. Most of these policies are designed for small to medium-size businesses.
Some examples of add-ons include fidelity and forgery, merchandise spoilage, and damage from crime. You may also need to include liquor liability insurance. Don’t assume the basic policy covers any of these incidents unless they are spelled out.
Understanding Property Insurance in BOP
Coverage for your business property is usually based on what is named in the policy. If it’s not listed, it likely won’t be covered. Common situations that are usually covered include fire, wind, smoke damage, vandalism, and explosions. This is the standard policy. An all-risk or open-peril policy covers everything unless specifically excluded. Just make sure you know what kind of policy you have.
BOP generally covers the building if it is owned or rented by the business owner, along with any other buildings and property owned by the business. Items owned by a third party and kept at the business may be covered. A prime example is a body shop where the customer’s cars are protected if damage should occur while on the property.
Business property not kept on the premises may be covered, but it can be excluded, depending on what your policy states. When employees take a work laptop home, it may be covered, but you don’t want to assume coverage.
Understanding Business Interruption and Liability Coverage
Business interruption coverage protects the business from loss of income that occurs with a natural disaster, such as fire, hurricane, or earthquake. It can pay for extra expenses that are incurred while the business operates out of a temporary space.
Liability coverage pays for expenses associated with an incident in which the business is deemed responsible. This would include any damage to property or injury to persons due to errors provided with service, defective products, or other issues that the owner should have been aware of and taken care of.
Requirements for the Business With BOP Insurance
To qualify for coverage, the business must meet specific criteria. This often includes the size of the business, where it is located, what industry it is in, and how much revenue it brings in. Insurance providers may differ in their requirements.
Not all businesses will qualify for BOP insurance. A business that handles transactions off-premises may be disqualified from coverage, depending on the amount of time spent at the site. Office and retail businesses usually qualify for BOP coverage. Eateries may be eligible along with apartment buildings and other service-related businesses.
If you would like to know if your business qualifies or how much coverage would be for your company, you should speak with a business insurance provider. They can answer your questions and help you get the coverage you need to protect your business, your employees, and your customers. You can decide how much coverage you require and what add-ons are necessary for your company’s operations.