Understanding Business Owners Policies (BOPs)

June 18, 2019||inBusiness Insurance|bop, business insurance, business interruption insurance, business owners policy

A BOP—a Business Owners Policy—can protect your small business against today’s most common risks. Fire, burglary, liability, and business interruption losses are all covered under a BOP.

Since a BOP is prepackaged, there is only one policy to review, and it can be more cost-effective than purchasing separate policies. Additional coverage can be added in the form of endorsements or riders.

Understanding Business Owners Policies (BOPs)
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Since a BOP insurance policy is specifically designed for small and medium-sized businesses, the type of business can influence eligibility. Typically, companies with 100 employees or fewer and revenues of up to about $5 million or less are candidates for a BOP. Some types of businesses, such as restaurants, may be ineligible for a BOP because of the specific risks inherent in the industry and may need to consider buying individual coverages separately.

Combining Three Insurance Policies Into One Package

In a single, convenient package, a BOP provides the core insurance that most small businesses need, including:

  • Property Insurance | protection for your building or office space and business property, such as equipment and inventory.
  • Liability Insurance | coverage for costs if someone is injured at your business or by using your products or services.
  • Business Interruption Insurance | also known as Business Income Insurance, replaces lost revenues if your business has to shut down due to fire, wind damage, or other covered losses.

You Can Also Tailor a BOP to Meet Your Needs

It’s important to understand that a BOP doesn’t cover all risks associated with running a small business, and the coverage limits are usually lower. If you have employees, you may be required to carry workers’ compensation insurance, depending on your state. You’ll need coverage beyond your personal car insurance if you have a business-owned vehicle. You might also consider insurance for relatively new risks such as computer system break-ins or business identity theft.

Unique risks are associated with your small business; an insurance professional can help you find the right coverages.

Here are some other types of insurance to explore and ask about:

Increasing Your Coverage with Excess and Umbrella Insurance

You can increase the protection your BOP and other business insurance policies provide by adding an excess liability or Umbrella Insurance policy. This supplemental policy boosts your coverage beyond the limits of your primary insurance policies. Depending on the policy, your umbrella coverage is designed to broaden and increase coverage, “filling in the gaps” left by other types of liability insurance by covering additional risk areas and even reimbursing you for deductibles. Our team at Murphy Insurance can advise you about combining an umbrella policy with a BOP or other business insurance. Please Contact Us.

Source: Insurance Information Institute

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