The uncertainties that many small businesses face daily make it vital to have contingency measures to avert loss. One way to protect your business against financial loss is to have the right insurance policies in place. As an entrepreneur, consider getting a business owner's policy (BOP) for coverage against multiple perils that may negatively impact your finances. Here's a look at what a BOP is and the benefits of having this insurance coverage for your business.
What Is BOP Insurance?
A BOP is a unique insurance solution that protects the business property against numerous perils and commercial liability coverage in a single package. It usually caters to the coverage requirements and budgets of SMEs.
What Are the Perks of Having BOP Insurance?
By combining property and business liability protection, a BOP offers the following benefits:
- It is cheaper for SMEs-The total protection provided is less expensive than purchasing business property coverage and a commercial general liability policy separately.
- It is customizable-Depending on your type of business, certain insurance policies may be more important to you than others. You can assess your needs with the help of an insurance expert to customize your BOP based on your unique requirements. This way, you can maximize coverage while saving on business insurance costs.
What Specific Coverages Does a BOP Provide?
At the very basic, a BOP will provide these two coverages:
- Property-This insurance component covers tangible business assets against damage. The items you can protect with the policy include your business building, inventory, and office equipment, whether you own or have rented the properties. Theft and damage from events such as wind, fire, and vandalism are also covered under this policy.
- General liability (GL)-You'll need this protection when customers or third parties sue your company for injuries or losses related to your business operations or premises. Slip and fall accidents on your property, damage from using defective products, etc., can result in costly claims against your company. Having GL coverage as part of your BOP can pay for any such claims and attorney fees if you're taken to court.
Extra BOP Protection
When a disaster like fire strikes and your business building is damaged, you may be forced to shut down and halt operations as you rebuild. If business interruption is included in your BOP, you can be compensated for any loss of income during the rebuilding period. Provided the loss event is covered, your policy can pay for any extra cost of relocating business operations to a temporary workspace.
Does Your Business Qualify for a BOP?
Since a BOP is a special insurance solution for specific SME coverage needs, qualification for it isn't automatic. A company's operations and risk profile usually determine eligibility for this coverage. If you're an SME operating in a low-risk industry, you probably qualify for a BOP.
Generally, SMEs that qualify for BOP insurance tend to have the following
characteristics:
- 100 employees or fewer
- Have annual revenues of not more than $5 million
Companies that don't qualify for a BOP based on their insurance risk profile can obtain each policy separately. Be sure to discuss your coverage needs and eligibility for a GOP with your insurer.
These are the key protections a business owner's policy can provide for your company. For a thorough assessment of your coverage needs to avoid serious financial losses when a covered disaster strikes,
contact the team at
Club Agency Insurance Brokerage today. We are ready to get you a customized policy based on your unique insurance requirements.
