Business Owners Policy

What is Business Owners Policy (BOP)?

The business owners policy is comprised of several business-related coverages bundled together in one convenient package; most commonly including general liability, commercial property, business interruption insurance. Some bundles may also include coverage for crime and peril as part of these bundles, while others as add-ons only. 

A standard business owners policy covers:

• Any business-related personal property located in covered buildings 
• The business’ declared buildings, also equipment and machinery installed
• Property belonging to other people (rental property)
• Improvements for tenants
• Building glass (owner or tenant)
  

Generally, the BOP should cover the policyholder or the insured for any loss or damages, as long as not specifically listed in the policy’s exclusions section.  

Why purchase a business owners policy?

The business owners policy provides the policyholder with coverage for most major property and liability risk, all in one package. Policies like these are designed so that the insured has all the basic coverages they need in one plan, often at less the cost that would be paid if they purchased these plans individually. 

The business owner’s policy is an insurance bundle commonly used in many industries, including those in retail, realtors needing landlord insurance, and more. However, not all policies are equal. There are numerous business owners policies on the market. Those seeking these policies should make sure they purchase BOP coverage offering benefits specific to their industry.  For example, a landlord or real estate pro living in states that often experience natural disasters should seek a bundle that includes special considerations perils such as extreme weather coverage, flood coverage, wildfire coverage, or one offering these and others as an additional coverage option.

Some business liability coverage may be included

Let’s look at liability, another coverage included in these bundles. A business owners policy that includes liability coverage helps the insured in the event they are held legally responsible for damages they may have inflicted on others while doing business. This may include anything done during their day-to-day business operations that subsequently caused bodily injury to persons or property damages, such as faulty installations or other errors.

Some common additional coverages available

• Depending on the insurer and the type of original coverage purchased, additional coverage  may be available. These may include: accounts receivable, cyber liability, crime, forgery, equipment, merchandise spoilage, rented vehicles, fidelity, more. 

What about business interruption

The business interruption insurance component of these policies protects the insured against certain types of financial losses, providing compensation helping them stay afloat IF they are unable to continue operations. The terms of the BOP policy will dictate what kind of conditions, i.e. natural, man-made, etc., are eligible for payout. 

There may be special requirements before one can purchase a BOP

Not all businesses will qualify for these types of policies, as providers may have special eligibility requirements before one can purchase these bundles. Among the requirements a potential insurance purchase may need to meet include: location requirements, location size, revenue, industry, and more. 

For example, a medium-sized apartment building or retail store property may be eligible for one insurer’s business owner policy, while properties for smaller buildings or in other industries in the same regions may not.