What Is a Business Owner's Policy?

A business owner's policy (BOP) combines protection for all major property and liability risks in one insurance package. This type of policy assembles the basic coverages required by a business owner in one bundle; however, it is usually sold at a premium that is less than the total cost of the individual coverages. 

Understanding Business Owner's Policies

A business owner's policy offers several insurance products rolled into one, generally targeted to small- and mid-size businesses. Business owner's insurance typically includes property, business interruption, and liability insurance. Yet, most policies require businesses to meet certain eligibility criteria to qualify. 

The 澳洲幸运5官方开奖结果体彩网:property insurance portion o🍒f a BOP is usually available as named-♍peril coverage, which provides coverage only for damage caused by events specifically listed in the policy (typically fire, explosion, wind damage, vandalism, smoke damage, etc.). Some BOPs offer open-peril or “all-risk” coverage; this option is available from the “special” BOP form rather than the “standard” type of BOP.

Properties covered by a BOP usually include buildings (owned or rented, additio🥀ns or additions in progress, and outdoor fixtures). The BOP will also cover any business-owned items or items owned by a third party but kept temporarily in the care, custody, or control of the business or business owner. The business property must usually be stored or kept in qualifying proximity of business premises (such as within 100 fee🥂t of the premises).

With business interruption insurance included in a BOP, the insurer covers the loss of income resulting from a fire or other catastrophe that disrupts the opeওration of the business. It can also include the extra expense of operating༺ out of a temporary location.

BOPs with 澳洲幸运5官方开奖结果体彩网:liability protection will have the insurance company cover the insured's legal responsibility for damages it may inflictဣ on others. This damage would have to be a result of things done in the normal course of business operations, which may cause bodi༒ly injury or property damage due to defective products, faulty installations, and errors in provided services.

Special Considerations 

A business owner's policy might also include crime insurance, vehicle coverage, and 澳洲幸运5官方开奖结果体彩网:flood insurance. Depending on a business's individual situation, the business owner and the insurance company may make arrangement🧸s for additional coverage components.

Some of these mig෴ht include certain crimes, spoilage of merchandise, computer equipment, mechanical breakdown, forgery, and fidelity𒀰 bond, but the coverage limits for these inclusions are typically low.

A BOP typically does not cover professional liability, worker’s compensation, health, or disability insurance. These items would require separate policies.

Requirements for a Business Owner's Policy

Not all businesses qualify for business owner's policies. Eligibility requirements differ among providers. Insurance providers may have requirements regarding business location, the size of the location, revenue, and class of business. 

For example, most insurance providers only cover businesses that handle all business on-premises. They may also have limitations if a primary business p💯roperty measures over or under a specified area. Typically, business classes eligible for BOPs include retail stores, apartment bui🔥ldings, small restaurants, and office-based businesses.

The Bottom Line

A business owner's policy (BOP) can be a great way to efficiently obtain the various types of insurance policies needed for a business, but at a premium when compared to purchasing individual policies. For your own business, determine whether the cost is a hindrance or if an efficient insurance method is preferable.