Business Owners Policy: What’s Covered and What’s Not
Business Owners Policy
A business owners policy is designed specifically to limit a business owner’s risk and liability under one bundled package. Typically containing both a general liability insurance policy and a major property insurance policy, a business owners policy is intended for small and medium-sized businesses. When bundled into one policy, these plans are significantly more affordable than if a business buys them separately.
What is a Business Owners Policy (BOP)?
A business owners policy, often referred to as a BOP, is an insurance policy that covers the basic needs of most small to medium-size businesses. Premiums on a BOP can range anywhere between $500 and $15,000 depending on several factors, including business size, location, and the number of employees.Common Coverages that can be included in a Business Owners Policy (BOP) include:
Business Property Insurance: This policy covers the physical building and real estate in which the business is conducted and the contents of said structure. The business property insurance portion of the BOP covers most property owned or used by the business, including machinery, computers, inventory and raw materials.
Business Interruption Insurance: If your business loses income as the result of a fire, flood or any other disaster that forces you to close your business temporarily, your BOP will usually cover that loss. It can also cover the cost associated with running your business from another temporary location. Most BOPs structures provide up to 12 months of operating income for businesses forced to close down in a disaster.
General Liability Insurance: This policy covers any harm your business or employees may cause to others, including both things the company does or fails to do to protect someone’s safety during normal business operations. Whether the commission or omission results in property damage or bodily injury, the policy will protect you.
Cyber Liability Insurance: For business who handle sensitive information, a cyber-liability policy will cover the cost of notifying anyone impacted by a data breach (digital or physical), the cost of defending yourself against legal action, and replace the income or expenses incurred if you have to close your business because of the breach. The policy covers data onsite and offsite.
What is Not Covered by a BOP?
A business owners policy does not cover commercial auto insurance, professional liability insurance – more commonly known as Errors & Omissions insurance – workers’ compensation insurance or health and disability insurance.Separate insurance policies are required to cover professional services, vehicles, and your employees.For more information on a business owners policy, or for a free consultation on your current insurance coverages, contact one of our licensed insurance associates today at (805) 564-7645 or contact us online.