Business Owner's Policy (2024)

FAQs

What does a business owner's policy cover? ›

A Business Owner's Policy (BOP) bundles business property and liability insurance into one policy. This means it can help cover claims of bodily injury and property damage to your building, equipment or inventory.

A basic businessowners policy typically includes three or four key coverages: Commercial property insurance, which protects your building, equipment and inventory. General liability insurance, which helps cover any medical expenses and bodily injury/property damages you and your employees are legally responsible for.

BOPs do NOT cover professional liability, auto insurance, worker's compensation or health and disability insurance. You'll need separate insurance policies to cover professional services, vehicles and your employees.

Any business that has assets, such as equipment or inventory, could benefit from having a BOP. A BOP also is important for anyone who has a brick-and-mortar business location. Business owner's policies are typically available to businesses that have less than $5 million in annual revenue and fewer than 100 employees.

A BOP is appropriate for any business that has employees or physical property. The exception is a home-based business, which may sometimes be covered under your home or renters policy. You should check the terms of your home/renters policy to see what is and is not covered.

A BOP provides business income protection in case your property is damaged or destroyed by a fire, water damage, or other covered loss and your revenue stream is impacted.

A BOP typically protects business owners against property damage, peril, business interruption, and liability. While coverages vary among insurance providers, businesses can often opt in for additional coverage, such as crime, spoilage of merchandise, forgery, fidelity, and more.

The following risks are ineligible for coverage under the program: automobile dealers and all types of automotive repair and service operations, • banks and all types of financial institutions, • places of amusem*nt, and • wholesalers.

Your business owner's policy premium can typically be paid in monthly or annual installments. It might be tempting to go with a smaller monthly payment, but consider paying the full premium. Many insurers offer a discount when the annual premium is paid in full.

This is a cost that you agree to pay for a claim yourself, and any claim that falls below your deductible value will not have coverage from the insurer. Therefore, you must select a deductible you can afford on your own. With the help of your business insurance agent, however, this will be an easy, affordable process.

What is medical expenses coverage in business owners policy? ›

Medical expense coverage: This covers medical expenses for bodily injury caused by an accident on premises that you own or rent, or by an accident that results from your business operations.

General liability insurance is included in a business owner's policy (BOP), a cost-saving bundle designed for low-risk businesses. General liability covers bodily injuries, damage to a customer's property, and advertising injuries. A BOP provides the same coverage, along with commercial property insurance.

Businesses in low-risk industries with a small footprint often qualify for a business owner's policy, which combines general liability insurance with commercial property insurance at a discount. The typical business that is eligible for a BOP: Has fewer than 100 employees.

Business Interruption Insurance Exclusions

Flood or earthquake damage, which you'll need a separate policy for. Undocumented income that's not listed on your business' financial records. Utilities, because they're usually turned off when your business closes due to damage.

Most small businesses can benefit from a business income insurance policy. This coverage helps pay for lost income if your company has to shut down due to a covered loss, like a fire.

A BOP typically protects business owners against property damage, peril, business interruption, and liability. While coverages vary among insurance providers, businesses can often opt in for additional coverage, such as crime, spoilage of merchandise, forgery, fidelity, and more.

Commercial General Liability (CGL) insurance protects business owners against claims of liability for bodily injury, property damage, and personal and advertising injury (slander and false advertising).

Business Income coverage would provide protection against certain financial losses (i.e., the profits that would have been earned during the two-month period the shop is unable to operate and normal continuing operating expenses, such as electrical costs, incurred during that time).

One of the most notable differences may be that a businessowners policy is prepackaged and a commercial package policy is not. When it comes to a BOP, what you see is what you get. The policy is pre-fixed and in most cases, offers some level of property, liability, and business interruption coverage.