Any business owner knows that leading an organization is a challenging venture that comes with risks, many of which are often unavoidable. If you own a company, one of your first instincts may be to purchase general liability insurance to protect your business. However, general liability policies do not offer coverage for personal property. For this, you will need to buy a Business Owners Policy (BOP). Here is a business owners policy coverage guide to assist you through this.
What Coverage Do Business Owners Policies Include?
Most Business Owners Policies typically include three major areas of coverage that can be beneficial to businesses in several industries: property insurance for your building and its contents, business interruption coverage and liability protection. Here is a close look at each of these three coverage areas.
Property Insurance For Buildings & Contents
One of the main things that a BOP covers is the building where your business is located, as well as the contents of your office. This includes inventory, equipment, (computers, printers, machinery, etc.) and furniture. Many insurance carriers frequently provide two distinct forms of property coverage: standard and special. Special commercial property insurance policies offer more comprehensive coverage and may help cover losses of important business records or accounts receivable. Be sure to ask if your policy can pay your replacement or repair costs in the event your property becomes damaged in a fire or another similar incident.
Business Interruption Insurance
This coverage will help you in the event that your business is forced to temporarily shutter due to an unforeseen event (flood, fire, pandemic, etc.). This type of insurance may cover certain operating expenses while your company recovers. These expenses include lost net income, taxes, loan payments and payroll-related expenses. Business interruption coverage may also pay for the added cost of operating out of a temporary site. Utilities are typically not covered by business interruption insurance, however.
Liability coverage protects you in the event that someone sues your business after being injured at your workplace. . It will also pay for your ensuing defense-related costs. This type of protection can be extremely beneficial because in certain cases, companies face lawsuits despite the fact that they were not at-fault for an accident.
What Doesn’t A BOP Cover?
As advantageous as a Business Owners Policy is, it does not cover all claims or incidents. Here are two things that BOPs do not typically cover.
Claims Arising From Services Performed
A BOP does not cover claims that arise from incomplete, delayed or undelivered services. If a client files a lawsuit against your business for this reason, you will need to purchase Errors and Omissions (E&O) Insurance, which is a type of professional liability insurance. This type of coverage can generally pay for your legal expenses.
Damages Stemming From Inaccurate Or Incomplete Advice Given
Business Owners Policies do not cover damages that result from inaccurate or incomplete professional advice. An E&O insurance policy can also protect you against these claims. If you own a law firm or a financial advisory company, this type of coverage may be especially beneficial.
Why Do I Need To Acquire A Business Owners Policy?
A Business Owner Policy is highly convenient because it combines commercial liability insurance and commercial property insurance. In some cases, it may even be more cost-effective to purchase a BOP than to buy two separate business policies that include the same areas of coverage. A BOP can ultimately save your company from the potential risk of spending large sums of money to combat lawsuits.
How Much Does A BOP Cost?
The cost of a business owners policy typically depends on several factors, including:
The size of your business
The industry your business belongs to
The state where your business is located
Cost to replace building or other types of property
Because of these variables, it is imperative that you speak to a specialist for guidance.
Reach Out To A Professional For A Business Owners Policy Coverage Guide
Speak to the professionals at Southern States Insurance in Alpharetta, Georgia for more information on business owners policies and their benefits. Since our founding in 1992, we have grown to become one of the largest, privately-held independent insurance agencies in the Southeastern United States. We work with nearly every major carrier and are dedicated to helping our clients find the best possible value.
If you are a business owner, you may benefit greatly from acquiring a BOP, especially if you own a small or mid-sized company. It’s important to note that the liability portion of a BOP does not cover employees, which means you will need to purchase additional coverage for this.
Call Southern States Insurance today at (888) 971-6304 or contact us online to request a quote.