Business Owners Policy (BOP)
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What is a Business Owners Policy?
But a general liability policy does not protect you when it comes to your OWN property. If you want to protect your own property, consider buying a Business Owners Policy (BOP). Of course, you could buy these policies separately, but more often than not combining these policies is more cost-effective and convenient for small businesses.
Do I need Business Owners Policy?
Almost every business owner will benefit from BOP. If you’re not sure if it’s necessary for your business, we’ve created a checklist:
- You need general liability insurance coverage
- Your business owns property equipment such as computers, inventory, printers and furniture
- Have employees who could act dishonestly or steal clients’ property
- You own the building at which you work and need to insure the property
- You work with a lot of customer or client data
What do Business Owners Policies cover?
The types of claims can vary widely as BOP’s cover both general liability claims and property claims. Below are examples of common claim scenarios, but please note that each policy is different and some add-ons may be necessary depending on your industr
Claim Type |
Definition |
Example |
|---|---|---|
| Bodily injury (operations) | Slip and fall’ and other bodily injury claims occurring at the office or job site. | A delivery driver holds a bakery responsible after he slips on flour on the floor of the kitchen, falling and breaking his tailbone. He sues the bakery for $75,000 in medical expenses, lost wages and other costs. |
| Bodily injury (product) | Bodily injury arising out of the use of the insured company’s product. | A small toy that is packed in each box a shoe company sold was swallowed by a child, temporarily blocking her airway. The child fully recovered from the injury but the parents sued for medical expenses and various other costs, alleging the safety precautions taken by the company were inadequate as exemplified by a lack of a “choking hazard” warning on the packaging. |
| Damage to the property of others in your care | Damaging property that belongs to someone else in the course of conducting business. Damage to rented office space. | A contractor renovating a house is knocking down a wall when he realizes that he forgot to turn off the water line. The water that floods out of the broken pipe floods the entire first floor of the house before it could be shut off, amounting in over $150,000 in property damage. |
| Damage to your property | Damaging property that belongs to you in the course of conducting business. Damage to owned office space. | A weekend fire at your office causes the loss of computers, desk, and other items in your space. Additionally, the fire department is not letting you into your building, causing all work to be put on hold. Property insurance would kick in to cover the loss of property and compensation for the loss in business and payroll. |
Bodily injury (operations)
What It Covers
Why you need it
Bodily injury (product)
What It Covers
Why you need it
Damage to the property of others in your care
What It Covers
Why you need it
Damage to your property
What It Covers
Why you need it
How much do BOPs cost?
Business owners insurance policy premiums vary depending on the location and size of your business, your occupation, the types of activities you conduct and the risk management practices you employ. However, minimum premiums may start from as little as $400 per year depending on the circumstances:
- Location
- Type of Business
- Value of Property
General Liability Insurance FAQ's?
What a BOP does NOT cover:
Certain claims, including those arising from professional services you perform. Client damages if you provide inaccurate or incomplete advice to a client.
What is General Liability Insurance?
General liability insurance protects your company from some of the fundamental risks that come with running a small business. Almost all companies and contracts take out this policy as it protects them against some of the most common claims businesses face like bodily injury, associated medical costs and damage to property that results from you business’s operations. GL will cover a wide range of risks by paying for the costs of litigation as well as restitution for the injury. These costs can include court-awarded damages, settlements, and medical costs. Lastly it can cover claims related to false or misleading advertising which can include libel, slander or copyright infringement.
What is Property Insurance?
Property insurance is an “indemnity” policy. This means that the policy is designed to reimburse the company for losses it directly experiences. Unlike “liability” policies, indemnity policies don’t require legal action (like a demand letter from a lawyer) for coverage to start. Once the property is damaged or destroyed, the claim process can begin.
Business personal property (BPP) losses are some of the most common insurance claims. Chances are this is what you imagine when you think of property insurance. It would reimburse the company for things like desks, computers and covered inventory after a fire. If your policy offers theft coverage, the impact of a burglary is reduced too. Your property insurance carrier is going to reimburse you for the stolen BPP.
If you own your building, property insurance is particularly important for you. Here, a fire doesn’t just mean lost computers and extra rent…you have a massive recovery project on your hands. A property insurance policy that includes building coverage would reduce your exposure to the litany of surprise demolition, clean-up and construction costs.