A Business Owner’s Policy (BOP) is a pre-packaged bundle of insurance coverages that are available to eligible small- and medium-sized businesses. BOPs are designed to provide a number of essential insurance coverages in a convenient and cost-effective manner. BOPs typically provide:
- property insurance to cover damage to buildings and contents;
- business income (business interruption) insurance to cover the loss of income resulting from a covered loss that disrupts business operations; and
- liability insurance to protect against liability claims for bodily injury and property damage occurring on a business’s premises or arising out of its operations.
Depending on the insurance company, additional coverages may be included in a BOP, or added for an additional premium, such as:
- Cyber Liability;
- Employment Practices Liability;
- Valuable Papers and Records;
- Personal and Advertising Liability
- Liquor Liability; and
- Equipment Breakdown.
BOP eligibility requirements can vary significantly among insurance companies, but they are typically reserved for small- and medium-sized businesses, which generally have fewer than 100 employees and annual revenues of less than $5 million. BOPs may also not be available to businesses operating in specific industries or those with highly specialized or high-risk operations.
It’s worth noting that BOPs may not be the best option for some businesses, regardless of eligibility. Some businesses, for example, may need higher limits or broader coverages than those available in a BOP. There are also a number of coverages that BOPs do not provide, such as workers compensation, commercial automobile and professional liability insurance. Even with a BOP, additional insurance policies may still be necessary.
Since BOPs are customized insurance products, coverage options (limits, exclusions, etc.) can vary significantly among insurers. This can make it difficult to understand and compare various BOP options. Businesses should work with an experienced insurance agent. Contact us to learn how a BOP can provide an effective and affordable insurance solution for your business.