A business owners policy combines coverages into one comprehensive package for businesses. These coverages typically cover basic dangers that all businesses should prepare for. The three main areas a business owners policy (BOP) covers are:
· Property: Property insurance, similar to dwelling coverage for home insurance, covers the physical property owned by the business from damages due to fire, lightning, smoke, hail, theft, vandalism and more. It can also cover the items and equipment inside the physical building.
· General Liability: General liability insurance covers incidents involving non-professional negligence, bodily injury and property damage. This insurance can compensate for damaged property and medical expenses a third party may suffer as a result of everyday business operations.
· Business Interruption Insurance: Business interruption insurance helps with the income lost while the business is inoperable due to a disaster. For example, if a tornado sweeps in and destroys your restaurant, business interruption insurance will help cover the income your restaurant loses while it recovers.
BOPs are designed for small businesses in low-risk industries, and thus don’t have much flexibility when it comes to coverage. You may add some coverages, however, such as:
· Data Breach Coverage: Data breach coverage helps with the costs of lawsuits and legal fees that may arise as a result of a data breach.
· Professional Liability: Professional liability insurance, unlike general liability, covers professional negligence. This refers to incidents involving a professional’s advice or services causing injury or monetary loss for their clients.
· Cyber Liability: Cyber liability refers to a wide range of dangers that come with keeping sensitive and important information electronically. Like data breach coverage, cyber liability insurance can help with the fallout costs after electronic data is damaged or lost.
· Employment Practices Liability: Employment practices liability protects the business when it comes to claims based on employment practices. Claims of this nature generally include sexual harassment, discrimination, wrongful firing or hiring and more.
· Umbrella Liability Insurance: A separate policy you can add is an umbrella liability insurance policy. This steps in if your other liability coverages reach their maximum. For example, if your general liability covers $1 million and you owe $2 million after an accident, an umbrella liability policy will help cover the remaining #1 million so your business won’t be paying the complete difference out of pocket.
Every policy is different since every business is different, so be sure to find a policy that suits your company’s needs.