Most small business’ start out insuring their business with a Business Owners Policy, commonly referred to as a BOP policy in insurance lingo.
A BOP policy is designed specifically for a small business by packaging important coverages together; general liability, loss of business income and coverage for their business property which is sometimes called contents or BPP are the 3 we will discuss here in more detail
General Liability
Provides payment to someone else or a business for which you or your employees cause ‘bodily injury’ or ‘property damage’ while conducting your business activities. This can include injuries on your business premises, advertising injuries, copyright infringement, slander and liable.
Your policy will pay for lawyer’s fees, settlements or judgments against you, medical expenses to the injured party and other expenses related to a potential lawsuit.
Business Property
Every business has at least some property. A business starting out might just have a laptop, cellphone and a desk. Insurance companies are aware that this type of property is also used for ‘personal use,’ but if it has ANY business use, it will be considered business property for CLAIMS purposes. Below are the types of property that are covered by a BOP.
1. Damage to buildings you own, lease or rent
2. Damage to business equipment, inventory and supplies
Make sure you purchase a BOP which gives you ‘full replacement’ when valuing your property. This means it would be replaced ‘brand new’ with a like kind or quality. Also make sure the types of losses covered is the broadest definition of loss called ‘special.’
Loss of Business Income
Business Income insurance is provided to allow the company to maintain cashflow if the business must suspend business operations, but only from a covered property loss. The funds can be used to pay key employees, so they won’t leave during the shutdown, rent and ongoing fixed expenses which are necessary to keep paying while the business operations are shut down.
BOPs are customizable, and a business owner can purchase additional coverages tailored to the industry and business’ unique needs.
Besides a BOP policy, most business’ will also need to purchase Work Comp Insurance to protect their workers from on the job injuries, Commercial Auto Insurance for vehicles use in the business, Data Breach insurance coverage, Professional Liability Insurance Coverage, Product Liability Insurance and additional liability coverage provided by an Liability Umbrella policy.
The coverage options listed here is not inclusive and we encourage you to contact your insurance professional to get advice on the insurance needs of your particular business. Or call us at Denver West Insurance Brokers for assistance or additional questions.
Note: Data and information provided on this site is for informational purposes only and should not be considered professional advice. Denver West Insurance Brokers makes no representations as to accuracy, or validity of any information on this site and will not be liable for any errors, omissions, losses, injuries, or damages arising from its display or use.