A business owner’s policy (BOP) combines liability insurance and property insurance under the same umbrella, protecting small and medium-sized businesses from both internal and external liabilities.
BOP Coverage
BOP coverages are best-suited to small businesses and sole proprietorships that lack adequate funds to purchase these policies individually. It is a combination policy that offers the following coverages:
- Business Liability Insurance- It protects your business from any lawsuits arising from harm caused by you or any members of your staff to a third-party. These include poor service, bad products, and mediocre installations.
- Business Property Insurance- It covers your equipment and other assets owned by your business, including vehicles and buildings.
- Business Interruption Insurance- It covers any losses that arise due to a break in business operations due to uncontrollable circumstances such as a fire outbreak.
However, this policy will not cover professional liability, auto insurance, worker’s compensation, or health and disability insurance. With the right BOP insurance, you do not have to worry about incurring liabilities or protecting your business assets. Your small/ medium-sized business will be well protected, and you will be able to focus on creating more value and expanding your business.
Key Factors to Consider
Here are some key factors that can help you determine if your business is suitable for the BOP coverage:
- The Extent of Risks Involved
If you operate in a high-risk business with a propensity to get sued often, you need the liability coverage that the BOP insurance offers. This policy will protect you from having to pay out of pocket for any sudden liabilities. - Location of Your Business
If you have a physical location for your business, even if it is run out of your garage or living room, you must get a BOP insurance coverage to protect your business location. You need not own the property as rented areas are duly covered. - Value of Your Business Assets
If you have expensive business assets that are subject to theft or damages, BOP insurance will help you to protect these assets and cover any losses.
Other Industries Served
Risks involved: Bakeries are labor and cash-intensive businesses that require a lot of moving parts which means there are several points of liability.
A BOP policy will protect your machinery and office space, and cover any liabilities that result from customer injuries. You can also customize your BOP coverage to fit your unique needs.
Risks involved: Owning a restaurant can be exhausting as you are required to juggle various positions at once. From protecting your equipment to keeping a record of the inventory, as a restaurant owner you have a lot at stake.
A BOP coverage will ease your mind and let you use your time more productively. It will protect your space, equipment, and inventory and cover any liabilities/claims resulting from poor service.
Risks involved: If you own a salon, you might be aware of the unique risks associated with your business. Unfortunate events such as tripping in the shampoo station or suggesting the wrong spa package might result in injuries or damages, leading to expensive lawsuits.
BOP insurance will protect your salon business from claims and lawsuits related to third-party bodily injuries. It will also protect your equipment, furniture, tools from theft or damage.
Risks involved: Tech companies (especially startups) are fast-paced businesses that are quite volatile and may incur several external and internal liabilities.
A BOP will cover assets such as laptops, damaged property, injury to clients, and lawsuits arising from copyright infringements. It will protect your tech company from incurring such liabilities even before they occur.
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