If you own a business, you most likely have one or more types of business insurance policies. Some of the different types of policies include property and casualty insurance, liability insurance, business interruption insurance, and workers’ compensation insurance. Unless you qualify to self-insure, workers’ compensation insurance is mandatory. Small- to medium-size businesses that aren’t involved in high-risk operations are typically eligible for commercial property and general liability package policies called Business Owner’s Policies (BOPs). A BOP policy is a package of coverage designed for small and medium sized businesses that offers both commercial property coverage and commercial general liability coverage.
Business owner’s policies include a property policy, which provides coverage for physical assets, and also includes a general liability policy, which provides coverage for commercial liability. Typical coverage included in a BOP include vehicle insurance, crime insurance, and flood insurance in addition to the property and liability coverage. Some of the other types of coverage that may be included in a BOP include loss of business income and/or extra expense that result from losses caused by a covered peril. A peril is a source of risk such as wind, hail, rain, fire, etc.
Property insurance coverage in a BOP typically provides replacement cost coverage for owned property and the property of others.
- General liability insurance coverage in a BOP typically provides coverage for claims of bodily injury or property damage. Additionally, the general liability portion and also provides coverage to pay costs associated with lawsuits brought against the business for bodily, property damage, and claims of libel, slander, and false advertising.
Businesses that provide services should strongly consider obtaining errors and omissions insurance (E&O), which is a type of liability policy that provides coverage against claims of malpractice, negligence, and errors that might arise from your business providing services to your customers.
Business owner’s policies are typically much less expensive than if you were to go out and purchase the types of insurance policies already included in a BOP package separately. BOPs also tend to fill in a lot of coverage gaps that may not have been considered when purchasing separate policies, which makes them a convenient, inexpensive, and necessary component of a business.