Business Owners Insurance Questions

What is a BOP?

BOP is a businessowners policy that packages the basic coverages most businesses need. BOP is a simplified way of purchasing commercial insurance as opposed to buying a collection of small policies. Packaging coverage allows insurance companies to offer a lower premium.

Businessowner’s policies include property coverage, liability coverage and some additional types of coverage that most businesses require. It is important to note that certain coverages, such as workers compensation, auto, and flood, are not included. Businesses may add optional coverages that meet their specific needs.

What is typically covered on a BOP?

  • Property insurance – covers buildings, equipment and inventory.
  • Business interruption – will cover you if you are forced to shut operations or reduce production for a period of time. Business interruption insurance can provide money to offset lost profits or to pay continuing expenses such as payroll.
  • Crime insurance – covers the loss of money or securities resulting from burglaries, robberies or employee theft.
  • Liability insurance – covers lawsuits arising from accidents on business property, when you sell a product that damages the customer’s property, or you are accused of offenses such as slander, copyright infringement or invasion of privacy.

Why can’t I just insure the building for the value I choose? If we have a fire, chances are the whole building won’t burn down anyway.

It is in the your best interest to always insure your building and other property to value. BOP policies cover multiple risks, and potential for a total loss is real.

The premium is dependent on the value of the building and/or business personal property. By reducing your building limit, you do not reduce your exposure; therefore, it is important to insure your building to value. Some policies include a penalty for not insuring your building to the appropriate value.

The alarm company tells me that I’ll get a huge premium credit if I buy their alarm system. Is that true?

Unlike a Homeowners policy, the BOP policy does not, as a rule, automatically apply a credit for an alarm. In many cases, it is a policy condition for theft coverage.