Business Owners Policy: What’s Covered and What’s Not

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A business owner’s policy is one of the insurance policies that is designed specifically to limit a business owner’s risk and liability with one bundled package. It contained both a general liability insurance policy and a major property insurance policy. All business owners’ policies are intended for small and medium-sized businesses. The insurance policy plans are significantly more affordable than if a business buys them separately.

What is a Business Owners Policy (BOP)?

A business owner’s policy, popularly known as BOP, is an insurance policy that covers the basic needs of small to medium-sized businesses. Premiums on a BOP are between $500 and $15,000 depending on several factors, including business size, location, and the number of employees.

Common Coverages that can be included in a Business Owners Policy (BOP) include:

Business Property Insurance: It covers the physical building and real estate where the business is located and the contents of said structure. The business property insurance portion of the BOP covers the property owned or used by the business, such as machinery, computers, inventory, and raw materials.

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Business Interruption Insurance: If your business loses income due to fire, flood, or any other disaster that forces you to close your business temporarily, your BOP will cover the loss. The BOP covers the cost associated with running your business from another temporary location. BOPs structures provide up to 12 months of operating income for businesses forced to close down in a disaster.

General Liability Insurance: It covers any harm to your business or employees, including both things the company does or fails to do to protect someone’s safety during normal business operations. Whether the commission or omission outcome in property damage or injury, the policy will protect your business.

Cyber Liability Insurance: It is sensitive information, cyber-liability and covers the cost of notifying anyone impacted by a data breach (digital or physical), the cost of defending yourself against legal action, and replacing the income or expenses incurred if you have to close your business because of the breach. A cyber liability insurance policy covers data onsite and offsite.

What is Not Covered by a BOP?

A BOP does not cover commercial auto insurance, professional liability insurance, or Errors & Omissions insurance – workers’ compensation insurance or health and disability insurance.

Separate insurance policies are needed to cover professional services, vehicles, and your employees.

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