Business Owner’s Policy – The Fine Print

A business owner’s policy, referred to in the insurance industry as a BOP, provides property
protection for your business equipment and premises in the case of damage, destruction, or
theft. Like a general liability policy, it also includes liability protection when third parties are
injured on your premises. It may include other types of coverage for your business.
BOP’s must be tailored to specific business needs.

An item that is stolen or destroyed may be covered at replacement cost or actual value.
What is not covered by your policy is referred to as exclusions, and can include losses from
flood damage, riots and acts of terrorism, or other specified events.
If you want coverage for excluded events, you can get it (other than for “acts of God”). You
may need a separate policy (e.g., for coverage for flood damage) or a rider on your BOP for
other events.

BOP’s do not include coverage for business vehicles, worker’s compensation, employer
liability or errors and omissions. (Professional liability or malpractice insurance coverage is
not part of a BOP; you’ll need a separate policy for coverage from errors and omissions
arising from your work.)

The BOP always provides coverage for third-party injuries on your site. What about other
liabilities that can arise from your business operations? Check whether you have coverage for
off-site liability, product/operations liability, personal-type liability and host liquor liability
among other items.

If a catastrophe shuts you down—there’s a fire, a storm, or other major event—and you can’t
operate remotely, how will you pay your bills? Your BOP can include coverage for business
interruption so you can continue to pay your employees, your rent, and other overhead costs.
The coverage (also referred to as continuation coverage) may pay for operating from an
alternate location (e.g., renting temporary office space) and may even make up any lost
profits during this period.

Even if you already have a BOP, be sure to review your coverage on a regular basis (at least
annually). Your needs may change and you’ll want your policy to keep up with your business
growth. Keep our office in the loop so we can advise you when your policy should be
expanded.

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