- 22 September 2020
Business owners buy insurance policies to protect their valuable assets, especially those exposed to significant risks. You can purchase these policies separately, covering different assets. Alternatively, you can opt to obtain them as a business owners’ package, also called BOP insurance. An example of these policies is CO BOP Insurance.
What is BOP Insurance?
The business owner’s policy (BOP) is an insurance package covering a wide range of risks protection. The targets of these policies are small to medium enterprises.
Standard inclusions in the policy are property insurance, liability insurance, and business disruption. Some BOP policies may also include professional liability, worker’s compensation, auto insurance, and data breach.
The policy can either be a standard or special coverage, and the standard insurance policy is a named-peril coverage. The scope is limited to the properties or the causes of the damages listed on the policy. On the other hand, specialized BOP is an open-peril coverage. It’s broader and more comprehensive in scope.
The BOP policy covers buildings, equipment, inventories, and other essential assets owned by businesses. Some insurance companies may include third-party assets that your business keeps on its premises temporarily.
Buildings, inventories, equipment, and other properties must be within the qualified proximity indicated in the policy. Proximity ranges from 100 feet to as high as 150 feet. The exact number may depend on the insurance company and the premium/cost of the policy.
General Liability Insurance
Customers, clients, or other people sue business owners most of the time, even if you don’t do anything wrong. You can protect yourself against these business risks with general liability insurance.
General liability insurance covers legal fees and other costs when a client or others sue you, your business, or your employees for claims, including bodily harm, injuries, and property damages.
The number one requirement is that the cause of damage happens during business operations. These bodily injuries or property damages may arise from defective products to incorrect or faulty installations.
Business Interruption Insurance
Business disruptions happen all the time. These disruptions cause loss of income and may include fortuitous events such as a fire. The policy covers:
- Reimbursement of profit loss based on previous month’s operation
- Fixed operating costs
- Moving cost to a temporary location
- Operating expenses from a temporary business location
- Loan payments
The inclusions depend on the insurance coverage you paid for before the unforeseen event happened. Thus, it’s essential to identify significant risks early on.
The requirements depend on the insurance provider. One condition is the location and size of the land area, which must be outside your residence.
Eligible businesses must have a land area of no more than 100,000 square feet. The building must be six floors and below.
Another requirement is the number of employees. Some insurance providers only give BOP insurance to businesses with less than 100 employees.
Many insurance companies qualify small to mid-sized businesses with less than $5M annual turnover. Still, these numbers are for benchmarking only. Some may use a turnover much lower than this amount.
BOP insurance costs or premiums are dependent on the scope of coverage. Basic coverage is cheaper than a comprehensive and specialized policy. On average, the premium amount ranges from a few hundred dollars to several thousand per year.
Moreover, you can save on premium price if you pay the full amount for one year. Insurance providers often offer discounts if you pay for a year’s worth of an insurance premium.
Sometimes, standard insurance coverage may not be sufficient for businesses in specific industries. For example, you might need insurance against spoilage of merchandise, especially if your company transports consumable goods such as food or beverages.
If you have employees, a worker’s compensation insurance policy might be a great addition to your standard coverage. Similarly, any business benefits from data breach insurance or computer equipment insurance.
Whatever industry you operate in, you can find the insurance that fits your needs. All you need is to ask your trusted and knowledgeable insurance provider about these special considerations.
BOP insurance doesn’t lessen the risk of getting sued or suffering losses from business interruptions. But, carrying this policy will undoubtedly keep your mind at ease, especially if your business is prone to some of these inherent risks.
If you aren’t sure which insurance you need, or you want to request additional coverage to include in your BOP policy, contact us to speak with a trusted representative today.
About Mountainside Insurance Management
Mountainside Insurance Management, LLC is a multi-state insurance brokerage and management specialist. We are an independent brokerage and work with over 150 A+ carriers to secure comprehensive coverage for our clients. Our brokerage is committed to providing the highest quality insurance and risk management services at the most competitive premiums with hands-on services tailored to our customers’ needs. For more information about reducing your risk, contact us today at (720) 800-9495.