Business owners are subject to a lot of potential liabilities. Make sure you have a Business Owners Policy (BOP) to protect yourself. It is a simple and easy way to make sure your business is covered.
A BOP is a comprehensive package to cover all property and liability risks. Bop's are usually designed for small or medium sized businesses and offer a broader range of coverage for your business.
What is a Business Owners Policy?
A BOP puts different business policies all together for business in one single policy making it easier for you as a business owner. BOP's usually combine property and liability coverage together.
You can further tailor your BOP policy to meet your business' needs by adding additional coverage. Other policies business owners typically add on include business interruption and data breach coverage. Data breach coverage is useful if you handle private information on your customers.
What Coverages are Included in a BOP?
When customer property is damaged by your work or by an employee, business owners policy insurance may help pay for repairs or replacement.
Bodily Injury/Medical Expenses.
If someone other than an employee is injured on your property, a business owners policy can help with medical expenses plus legal expenses and damages.
If products developed or sold by your business harm people or property, property and liability insurance could help pay legal expenses associated with product liability lawsuits and medical expenses if an injury occurs.
Libel, Slander, and Copyright Infringement.
A business owners insurance policy helps protect you against some lawsuit expenses from personal and advertising injury. Advertising injury can include disparaging another business in your advertisements, stealing an advertising idea, and more.
Lost income coverage is where the policy would cover up to 12 months of income in case your business has to stop it's operations. This is to ensure bills and employees are paid. It could also cover things like advertising for a new location if you need to change locations.
Your Building or Leased Space.
This coverage provides protection for the building you own or even a building where you are required to provide insurance coverage as part of the lease.
The Contents of Your Building.
Property insurance can cover inventory, equipment, tools, and other people’s property in your building that has been damaged by an employee, yourself, theft, natural disaster, or weather.
Income From Your Business.
In the event of a disruption resulting from property damage, you may be covered for the expenses needed to resume business, including covering net income, payroll costs, and even temporary business relocation. This aspect of the coverage is sometimes called “business interruption insurance” or “business income insurance.”
Who is Covered by a Business Owners Policy?
Business and Employees: Your business and employees will be covered in case of bodily injury or property damage claims. The property of the business would be covered as well.
Parties to a Contract: If your business is part of a contract for work and a claim has to be filed, the part involved in the contract would come to your BOP first.
Suppliers: If your business is in the field of selling or renting products, suppliers will likely ask to indemnify them if a claim should need to be filed if the product is damaged.
Do I Need a Business Owners Policy?
A BOP is considered necessary if you meet any of the following:
1. Your business has a brick and mortar location.
2. You have things that can get stolen.
3. You are at risk for things like lawsuits.
4. You have less than 100 employees and $5 million in sales.
There are several different businesses that usually purchase a BOP, including:
- Religious organizations
- Consumer services
- Apartment buildings
- Technology consultants and solutions providers
- Retail stores
Keep in mind that not every business is eligible for a BOP. There are a few guidelines for determining if your business is eligible:
- Certain class of business (eligible classes includes small restaurants, stores, office- or service-based businesses, wholesale distributors, apartments and independent contractors).
- Where you conduct the majority of business operations (most policies require your business to complete most of its business on the premises)
- The size of your business’s primary location
- Your revenue
What Does a BOP Not Cover?
Business Owners Polices do not cover the following:
: Workers compensation, health and disability coverage will need to be purchased separately.
Vehicles for Work:
Commercial auto coverage will need to be purchased separately.
Professional Liability will need to be purchased separately.
Intentional bodily injury
(if your business is at fault).
Applies if your business deals with alcohol.
Injury to an employee (covered by workers compensation).
Anyone at the business that is covered by workers compensation, disability benefits, etc.
How Much Does a Business Owners Policy Cost?
The cost of a BOP varies based off several different factors such as where your business is located, risks associated with your business' industry, and size of the business. The premium of a BOP can range anywhere between $500 to $15,000.
Frequently Asked Questions
Read on to view some frequently asked questions from CoverWallet
What types of businesses are not eligible for a BOP?
A business owners insurance policy is designed for small businesses. It is a one-stop-shop kind of policy and for certain medium and large businesses this may not be good because you cannot tailor the coverage to your needs. If you are a manufacturer you should read your coverage carefully and more often than not, get a General Liability policy.
Is a BOP required by law?
The type of business you own and operate will dictate whether or not certain insurance policies are required by law. While a BOP is not required by law, sometimes General Liability is. Since the BOP is comprised of General Liability and Property it may be the best option for you as far as coverage and price go. Additionally, some professional services like therapists and consultants can be required to purchase Errors and Omissions insurance.
Does a Bop cover independent contractors?
As always, it is important to not only read your policy but to check with an experienced advisor to make sure you have the best policy for your needs. Most BOP’s will be able to provide coverage for independent contractors but that does not mean all of them will. All insurance policies are not created equal.
Can I combine other entities on my policy as part of my Named Insured?
You can combine different entities as a named insured on your policy if certain requirements are met. This usually includes having similar ownership and similar operations. It is important you check with an advisor as it almost always requires underwriter approval from the insurance company.
Business Owners Policy (BOP) in Los Angeles, CA
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