BUSINESS OWNERS POLICY (BOP)

A business owner’s policy (BOP) combines three types of coverages to protect your small business against a variety of claims.  The three most common types of coverages include:

• General liability insurance which helps protect businesses from claims that it caused bodily injuries or property damage to someone else’s belongings. It can also help protect your business from claims of personal injury, like libel or slander.

• Business property insurance, also known as commercial property insurance, helps protect your owned or rented physical building and the tools and equipment used to operate your company.

• Business income insurance, also known as business interruption coverage, helps replace your lost income if you can’t operate because of covered property damage. This includes damage from a fire, wind or theft.

    The general liability portion of a BOP safeguards your business in the event someone makes a claim against you or your business. General liability insurance provides protection from liability lawsuits resulting from things like a customer slipping on a wet floor, a defective product causing damage to a client’s property, or claims that the products or services you provided caused injury. It can also protect you from libel, slander and certain legal claims related to advertising.

    The property portion of a Business Owners Policy helps protect business property you own, lease or rent, including your buildings, equipment, furniture and inventory. It helps cover repair or replacement costs of stolen, damaged or destroyed property, including property that isn’t yours but was in your care. It can also cover loss of income and covered expenses like rent, payroll and other financial responsibilities while your property is being repaired or replaced after a fire or other covered loss.

    Business income is designed for help replacing lost income if an unexpected event causes a suspension in your business operations due to a covered loss. This insurance acts as business interruption insurance. It includes important monthly benefits to employees, such as payroll and any other financial payments that are due to them. This also includes essential payments, like rent. Depending on your policy, it may also cover other extra expenses incurred.

If you are a small business owner, a  business owner’s policy offers valuable protection if you encounter scenarios like the following:

• A customer trips over a loose wire while visiting your business, falls and fractures their wrist. They sue you to cover their medical expenses.
• One of your contractors loses control of a piece of equipment, which damages the wall of a client’s home or accidentally breaks an item of value while performing their work.
• A pipe bursts and floods one of your workrooms, damaging business-critical equipment and some of your products.
• A fire destroys one of your buildings, leading you to temporarily shut down part of your business. Yet, despite being shut down, you still have to pay rent and your employees.