Business Owners Policy (BOP) Insurance
When it comes to major corporations, business insurance can get pretty complicated. Different businesses and industries have different insurance requirements and needs, so it often makes sense for bigger organizations to purchase customized policy packages that are designed exclusively for their specific circumstances. However, the vast majority of small- to mid-sized businesses don’t need a bespoke coverage package. While different companies may need to add additional policies depending on their individual circumstances, a Business Owners Policy package covers most of the “basic” policies that all businesses should have.
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Business Owners Policy (BOP) Insurance
What is Business Owners Policy Insurance?
Business Owner’s Policy (BOP) insurance is actually a package of three business insurance policies: general liability, commercial property, and business interruption insurance. These three policies are necessary for nearly every company, regardless of size or industry. They protect businesses against the risks that the majority of owners are most likely to encounter—things like customer injury, property damage, or an unexpected business shutdown.
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What is Business Owners Policy Insurance?
What Are the Policies Included in BOP Insurance?
All three of the policies that are included in a BOP package—general liability, commercial property, and business interruption—will pay for a company’s costs in a variety of circumstances. The specific nature of each policy’s coverage varies by insurance type:
GENERAL LIABILITY
General liability insurance protects businesses against lawsuits brought by third parties that have been injured or whose property has been damaged in the course of the business’s operations. In these instances, GLI will pay for damages as well as any legal and medical fees or court settlements.
COMMERCIAL PROPERTY
General liability insurance only covers property damage for third parties, not damage to the company’s property or equipment. That’s what commercial property insurance is for: paying for the repair or replacement of company property that’s damaged or destroyed.
BUSINESS INTERRUPTION
Emergencies are expensive, and not just because companies are often liable for covering damages: in many situations, the circumstances surrounding the issue prevent the business from continuing to operate, which means it also loses income for as long as the situation persists. Business interruption covers that lost income in most situations.
What’s not covered?
There are certain risks and scenarios that might seem like they would fall under the umbrella of BOP insurance, but actually require a different type of policy. For example:
DAMAGE TO OR BY COMPANY VEHICLES
Even though company cars are company property, they’re not covered under commercial property insurance. Since car insurance comes with extra considerations, like collision coverage or uninsured motorist coverage, it requires a separate commercial auto policy.
DAMAGE CAUSED BY EARTHQUAKES OR FLOODS
Anyone who’s bought homeowners’ or renters’ insurance knows that most policies have exclusions for damage caused by earthquakes or floods. These circumstances are tricky because they’re so much more likely to occur in some geographic locations than others. For this reason, businesses that are located in flood and earthquake zones should buy separate coverage for these events.
LAWSUITS CAUSED BY COMPANY ERRORS
General liability insurance covers businesses in lawsuits brought by third parties, like customers or contractors, that have sustained damages as a consequence of the business’s operations. However, if that damage is caused by an error or omission by the company, it’s covered by professional liability insurance, not GLI.
Who is Workers’ Comp Insurance for?
SMALL BUSINESS OWNERS
BOP insurance makes it easy for smaller operations to easily obtain broad coverage for a big chunk of the risks they’re most likely to encounter. Especially when a business is young or small, a single incident has the potential to take down the entire company, so it’s especially important to ensure your small business is covered.
SMALL BUSINESS OWNERS
BOP insurance makes it easy for smaller operations to easily obtain broad coverage for a big chunk of the risks they’re most likely to encounter. Especially when a business is young or small, a single incident has the potential to take down the entire company, so it’s especially important to ensure your small business is covered.
SOLO ENTREPRENEURS
Many solo proprietors assume they don’t need business insurance because they (usually) don’t have a physical storefront or interact directly with parties that could sue for damages. However, all businesses are susceptible to interruptions in income, and it’s surprisingly easy to accidentally damage customers’ property.
SOLO ENTREPRENEURS
Many solo proprietors assume they don’t need business insurance because they (usually) don’t have a physical storefront or interact directly with parties that could sue for damages. However, all businesses are susceptible to interruptions in income, and it’s surprisingly easy to accidentally damage customers’ property.
GROWTH-STAGE COMPANIES
Growing pains aren’t just for kids; when a small business is ready to expand, it’s much more likely to encounter obstacles that could be financially harmful to the company. During these times of transition, it’s especially important to have all of your bases covered with regard to risk protection.
GROWTH-STAGE COMPANIES
Growing pains aren’t just for kids; when a small business is ready to expand, it’s much more likely to encounter obstacles that could be financially harmful to the company. During these times of transition, it’s especially important to have all of your bases covered with regard to risk protection.
Frequently Asked Questions
To put it simply: yes. The only reason a business should ever forego workers’ comp is if it legitimately has no employees. In most states, companies with even one employee must have workers’ comp insurance. However, some states require it only when you have three to five employees. Although not legally required in Texas, obtaining it is still a prudent decision.
The amount that a workers’ compensation policy pays out to the injured party varies depending on the state you’re in and how much you were making before you were injured. In most states, workers’ comp will replace up to two-thirds of the amount you were making before you were hurt.
Yes, workers’ comp recipients can work light or modified jobs while they’re injured. In this case, it is especially important for employees to comply with their doctor’s instructions in order to avoid violating the terms of their workers’ comp policy.
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