Data breaches, liability lawsuits, asset theft, and business interruptions are not problems for only large corporations. Even small businesses face these loss-causing issues from time to time. You could buy a separate cover for each risk, but a single business owner’s policy (BOP) is the more cost-effective way to protect your company. It rolls basic insurance coverages into a single package, and you can have it customized to suit your specific industry and business coverage needs. Read on to learn how BOP insurance can protect your company against financial loss.
What Does a Business Owners Policy Cover?
A BOP combines the following coverages into a single package:
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Business Property
BOP insurance can cover any business property that you own, lease, or rent. Covered items usually include equipment, inventory, buildings, and furniture. If your business premises are destroyed or damaged in a fire, this policy could cover the cost of replacing or repairing them. A BOP can also pay for the replacement of stolen business assets like computers and printers. It’ll usually cover third-party-owned properties under your company’s custody or control.
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General Liability
A BOP can be your safety net when a third party successfully files a liability case against your company. It can cover your legal responsibility for any injury or damage that your business may inflict on a customer, for example. However, you’re only covered against liability claims directly related to your business operations or the use of your products, such as:
- Defective products
- Faulty installation of equipment
- Errors in service provision
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Business Interruption
You would suffer financial loss from halting operations if a catastrophe like fire gutted down your business premises. BOP insurance could cover all lost earnings due to such business interruption. If you have to rent temporary business space due to the loss of property caused by the disaster, the policy may compensate you for such additional costs.
How to Customize Your Business Owners Insurance Policy
If a basic BOP doesn’t fully cover your business insurance needs, you can customize it accordingly. Based on your unique situation and industry, you may request additional separate policies. Optional coverages with which you can tailor your BOP insurance include:
- Crime insurance-Examples include fidelity bond (for protection against fraud by employees) and forgery coverage.
- Data breach-You may need this coverage option if you handle, process, store, or transmit personally identifiable information. If cybercriminals stole private customer data that’s in your custody, you may be liable for the resulting damage or loss. A data breach coverage could protect you against such a liability claim.
- Spoilage coverage-This endorsement may cover the loss of perishable merchandise stored within your business premises.
- Mechanical breakdown-This insurance option usually covers the unpredictable physical loss or damage to insured business equipment.
What Are the Benefits of a BOP?
By addressing multiple coverage needs in a single package, a BOP makes it easier to protect your business with insurance. It’s generally more affordable than the total cost of having separate business policies. Plus, you can customize it with appropriate riders to seal any coverage gaps.
What Are the Qualifications to Get a BOP?
Insurer’s design BOP packages to address the insurance needs of small and mid-size businesses, including:
- Businesses with physical offices
- Brick-and-mortar retail stores
- Apartment buildings
- Small restaurants
However, small enterprises don’t automatically qualify for business owners’ policies. Each provider may have unique eligibility criteria that companies must satisfy, such as:
- Business location
- Size of the business premise(s)
- Sales
- Class of business
Generally, insurers don’t sell BOP insurance to companies without a physical business location.
A business owner’s policy can protect your company against financial loss from liability settlements, property damage, business interruption, and many other risks. To start assessing your BOP coverage requirements and designing customized insurance protection, contact the experts at Modab Insurance Services today! We are happy to help you get a policy that comprehensively covers your business needs.
