A Business Owner's Policy (BOP) is usually the first step for small businesses looking to get basic property and liability coverage. A BOP allows a business to bundle property and liability coverage into a BOP and allows the business to obtain broad coverage with affordable premiums. For eligible small and medium-sized businesses, a BOP is a comprehensive package that can be a potential bargain source of insurance.
The Property Portion:
Like general property insurance coverage, the property portion of a BOP offers named perils or all risk coverage. Some policies will even include other types of property-related insurance such as extra expense policies as part of the package.
The Liability Portion:
The liability portion of a BOP is structured quite similarly to a stand-alone Commercial General Liability (CGL) policy. The primary difference: A BOP gives you much less flexibility in determining your coverage limits for particular claims. It's important, also to note that a BOP does not include professional liability insurance, which protects you from losses or expenses resulting from claims of errors or omissions or negligence in your business.
Business interruption insurance is generally included in a BOP. Business interruption insurance covers lost income and expenses incurred when a company suffers disaster-related damage. Operating expenses that continue to roll in even if business is suspended, such as payroll, are also covered.
BOPs typically provide reimbursement for up to a year of lost revenue resulting from an insured property loss.
Who Qualifies for a BOP?
To qualify for a BOP, a business has to meet certain criteria: The company should have 100 or fewer employees, and revenues should not be more than $1 million.
While purchasing a BOP is one of the most common types of insurance purchases for small businesses, some companies may find the coverage limits of BOPs to be too low, or may not like the lack of flexibility on options like coinsurance. The advantage, however is that what the policy lacks in flexibility it usually makes up for in lower premiums.
Researching Your BOP Options:
There are numerous Internet sites that let the small business quickly and cheaply find the type of insurance it may need. Instead of browsing through hundreds of pages of products and services, online forms allow you to describe your needs and produce quotes from multiple vendors. This process helps you determine what you need, compare proposals side-by-side, and negotiate with multiple vendors - so that you can make an informed purchasing decision in less time.
Related Topics:
Remote Backup
Disaster Recovery Plan
