What Is a Business Owners' Policy or a "BOP?"
A business owners’ policy (BOP) is one of the most important investments a business could make. Having insurance can help protect property and other assets that could be costly if something unexpected occurred. Insurance agents may recommend this type of policy, but knowing what it is and what it covers is key. A standard business owners’ policy usually covers the below protections, with additional coverage as an option.
Who Does a BOP Benefit?
If you have a business with 100 employees or less, but have property and equipment, this could be the type of policy that would work well for you. It is not really designed for home-based businesses, but is a good option for businesses with sales that bring in under $5 million dollars a year.
Commercial Property
This covers whether you have property, multiple locations, equipment, machinery and other inventory.
General Liability
If someone gets hurt on your property, this helps cover those medical expenses and/or property damage if one of your employees happens to damage someone else's property.
Business Income
Consider an unexpected fire or storm came through and you could not work at your primary place of business. In the event you have to relocate, this would help pay for that location, or provide a continuation of income if you have to temporarily close.
Commercial Auto
Do you have vehicles in your business, or drive your personal vehicle for business? Additionally, do you have employees driving on behalf of your company or have them driving their own vehicles? Commercial auto insurance will protect your interests. If your employees are driving their own vehicles, having a non-owner policy in place will provide protection for them and the business as well.
The above are standard coverage options for a BOP, but these additional options are also good to have, or possibly consider:
Crime Insurance
With theft, forgery and fraud so prevalent, having crime insurance will help protect your business in the event you have a data breach, for example.
Equipment Breakdown
If you have a lot of equipment and machinery that is an integral part of your business, having equipment breakdown insurance could save you a lot of money. This policy covers all of your equipment, including any computer equipment used for your business.
Accounts Receivable
If you incur any losses from clients who do not pay their bills, you won’t have to worry about cash flow problems. This insurance will help cover those losses and keep your operations going smoothly.
Who Needs a Business Owner’s Policy?
You should consider a business owner’s insurance policy if:
Your business has a physical location. It doesn’t matter where you conduct your business, it matters if your business and assets have coverage. Your BOP policy can help cover businesses run out of your home, a rented or owned office, store or garage.
There’s a possibility of you getting sued. For example, let’s say a customer who was injured at your work place slips and falls. Without the proper business owner’s insurance, you may be looking at hefty out-of-pocket fees to cover the customer’s medical expenses.
You have assets that could get stolen or damaged. From digital assets and customer data, to equipment, furniture, cash or inventory, some assets can be very hard to replace. With BOP Insurance, you don’t have to worry about where the money is coming from in the event you have assets that got stolen or damaged.
There are additional coverage options available for every type of business that can meet your needs. Speaking with an insurance agent will help decide what types of coverage options should be included in a business owners’ policy that will ensure your business remains operational year-round. It is important to consider all the options available in a BOP as a way to tailor what you need. Your policy should be specific to your industry and work to make things more cost-effective for you, with everything rolled into one main policy.
This content is developed from sources believed to be providing accurate information, and provided by Tempus Pecunia. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.