What is the Business Owners Policy (BOP) meaning? A BOP is an essential piece of coverage for anyone who owns their own business. This coverage protects small and medium-sized business owners from property damage, general liability, loss of wages, and more.
Learn everything you need to know about business owners’ insurance policies, and why they are important. Find out which losses and expenses for which this type of policy covers, and where that coverage ends. And, see how BOP coverage is specialized for the risks that small businesses are likely to face in 2021.
What is a Business Owners Policy? BOP Meaning Explained – 2021
Every small or medium-size business is likely to need a BOP, meaning a Business Owners Policy to provide coverage for general liability, property damage, and more. This type of policy is designed for businesses in every industry that are small enough to qualify. In general, a BOP provides much of the same type of coverage as is included in a homeowners insurance policy.
Large businesses often procure separate policies to meet their needs, whereas smaller business owners are inclined to purchase a bundled policy. Business owner policies let you bundle coverages into a single policy, whereas larger businesses pose too high of a risk for a bundled policy.
A Business Owners Policy (BOP) combines coverage for your business property, business interruption, and liability insurance into a single policy. This coverage comes into play when such events as a fire, natural disaster, or theft take place that results in bodily injury or property damage. Common businesses to purchase BOP insurance includes offices, contractors, restaurants, retail storefronts, and other small service industry businesses.
What Does a Business Owners Policy Cover?
Business Owners Insurance Policies offer coverage for the buildings in which your business operates, as well as the property within those buildings and owned by your business. Many insurance providers offer standard and special business owners’ policies from which to choose. Standard policies often are limited to property insurance, business interruption insurance, and liability coverage.
Many insurers offer additional coverage options for businesses that need special protections. For instance, you can customize a policy to include coverage for off-site utility service income, data breach coverage, and more. Insurance companies work to customize the coverages in your BOP to best serve the needs of your business.
What is Not Covered in a BOP?
Though a BOP is tailored to your unique business needs, there are several types of coverage that are not included in the policy. For example, a BOP does not include professional liability insurance, which is required for some professional service providers like attorneys and physicians. If your business operates a fleet of vehicles, you need a separate commercial auto insurance policy, and most states require businesses to carry workers’ compensation insurance – which is also separate from a BOP.
Do You Need a BOP?
So, how do you know if you need to purchase a Business Owners Policy? If your business operates from physical property, building, or location you need a BOP. These policies include property insurance for home-based businesses, as well as commercial business buildings. And, it doesn’t matter if you own or rent the space – a BOP provides property coverage.
If your business or employees deal with customers regularly you need a BOP. If a customer sues your business, your BOP covers the costs associated with litigation and damages. Without a BOP, you face shouldering the financial burden of any customers who sue your business.
Most importantly – a BOP provides coverage for theft, including digital theft and data breaches. With cyber theft and ransomware attacks on the rise, digital assets are more at risk than ever. Business owners have little recourse to take unless you are covered by a BOP.
If you own a small business, odds are that a Business Owners Policy is an essential piece of your coverage. Are you ready to find an insurance provider? Talk to an insurance associate today to learn more about the BOP meaning and small business coverage that is right for you.