Business owners insurance policy, sometimes referred to as a BOP, is designed specifically to help SMALL businesses protect themselves from property and liability LOSS. Only certain types of business operations can qualify for a business owners insurance policy (BOP).

Generally this type of commercial insurance is reserved for retail operations, stores, apartment buildings, business offices and similar types of commercial operations.

Lately the eligibility list has been expanding to include small contractors and commercial cooking (restaurant) operations as well.

For business types that qualify for business owners insurance (BOP) policies, each policy has a mandatory coverage portion and optional coverages that can be added thereby customizing the policy.

Of course exclusions and conditions apply to each policy.

Some of the “mandatory” coverages common to most policies are:

Business Property Insurance

Property insurance can help protect the property your business owns, leases or rents, including things like buildings, equipment, inventory, furniture and fixtures. It can provide coverage for damaged computers and media and loss of accounts receivable records.

Business Liability Coverage

Business Liability insurance insurance that covers your business in the event your business is responsible for causing harm to a person and/or damage to property. It also helps cover the cost of your defense.

Loss of Business Income

If unexpected events cause your operations to be suspended due to a covered cause of loss, Loss of Business Income coverage will help replace lost income to help you meet your continuing financial obligations such as rent or payroll.

Some Options Available On A Case By Case Basis:

  • Employment Practices Liability
  • Identity Theft
  • Electronic Data and Equipment
  • Personal Property of Others
  • Limited Property of Others Liability
  • Short-Term Pollution from Pollutants at Job Site
  • And some Professional Liability such as Beauty & Barber Shop Professional.

Some Caveats:

  • No policy covers everything, exclusions and limitations apply and vary from insurance company to insurance company.
  • Though grants of coverage are broad, a ‘covered cause of loss’ must occur to trigger coverage under the policy.
  • Usually, these policies will NOT cover Flood or Earthquake. Stand alone policies are available to address these items.

Summary

  • BOP (Business Owner Policies) polices are a great tool for Small Business Insurance. They are limited in application by insurance company guidelines and are generally Non Standard.
  • Insurance companies will set their own eligibility guidelines regarding Type and Size of operations. What one company will accept another my consider ineligible.
  • Again, these policies are NOT standard and vary greatly in terms of coverages, limits, coverage grants and exclusions.
  • As long as you fit an insurance company’s guidelines, this can be a very cost effective way to buy insurance for your Small Business.