Business Owner Policies Pt. 1 — Understanding BOPs
It’s not easy being a small business owner these days. Talk about multi-tasking! You need to stay up to speed on so many fronts from health care to employment law to product liability, you need to be a veritable Renaissance man to survive. On second thought, better make that Renaissance person to avoid any gender discrimination claims. It’s a wonder you find time to actually run your business, but we suggest you do take a few minutes out of your 25-hour day to read your business owners’ property insurance policy. It could save you money and grief.
First of all, is it an open peril policy that covers everything that isn’t specifically excluded, or do you have one or more single peril policies that only cover what is named? Examples of single peril (also called named peril) policies include flood insurance, fire insurance, electronic equipment insurance and similar coverage for a single event or cause of loss.
Unless you have very little to lose or you enjoy living dangerously, you really should consider insurance that provides a broad range of coverage. These are referred to in the insurance industry as BOPs or Business Owner Policies. BOPs can save you time and money by consolidating many of your business insurance needs into one convenient package to give you protection against a variety of potential losses.
Policies will vary from carrier to carrier, but typically your BOP will cover any building your company needs along with the stuff you need to run your operations. Building coverage will include both the actual structure along with permanently installed fixtures, equipment, machinery, outdoor fixtures, building maintenance and service equipment and supplies, and any building additions that are under construction. It will also cover most of the contents of your building, such as equipment, inventory, furniture and raw materials, and the property others that you are legally liable for, such as leased equipment or damage to a customer’s property left with you for repair.
Most business owners insurance policies include some commercial general liability (CGL) insurance, too. This will protect your business from claims for bodily injury resulting in actual physical damage or loss, property damage or loss, personal injury including slander and libel, and advertising injury.
If you rent or lease your business premises, review your lease to learn what your contract requires you carry. You may be expected to carry insurance on the building, particularly if you’re the only tenant. Or you might have to continue to make rent payments, even if the building is destroyed.
