Insurance Frequently Asked Questions: Business Owner's Policy

Business Owner’s Policy (BOP) provides comprehensive coverage of general liability and commercial property insurance at reasonable premiums. ABOP essentially bundles basic insurance coverage for the small business owner. The property insurance of BOP covers damage to real and personal property caused by perils such as fire, wind, theft, explosions, and vandalism to name a few. Liability protection coverage under BOP covers claims of bodily injury, personal injury, and property damage resulting from your business operations.

As a business owner, assess the risks and weigh out the protection requirements for your small business. Customize the policy considering the value of your building, contents, stock, computers, and equipment for replacement cost values to determine a property insurance limit to purchase. General Liability limits starting at $300,000 up to $1,000,000 are available on a BOP, consider your business operations and the potential business risks involved that could harm a person or damage property.

⇒ Property Damage

1. A client comes with their laptop to your office for a meeting. An employee’s glass of water spills on the laptop and causes a hardware malfunction. The client sues your company for a new laptop and the lost data.
2. Your restaurant is damaged from a hurricane, blowing off the roof and causing significant damage to the furniture and kitchen appliances. You are out of business for 6 months.

⇒ Bodily Injury

1. The child of a customer slips on the wet floor of your restaurant. The customer sues you for a huge amount claiming the child was severely injured and there are numerous medical bills.
2. Your restaurant client claims they got food poisoning after eating in your restaurant saying your meal was to blame. The customer who was sick for days and lost time at work hires an attorney and you receive a demand letter for $100,000.

⇒ Lost Revenue

1. There is a fire in your retail shop and you are unable to return to business as usual. You have no source of income to rent out another space to resume operations you have Business Interruption Insurance, you can submit a claim for renting a temporary space to get back to business.

Typically small to mid-sized, low risk “main street” ventures are considered for this type of insurance. Different insurance companies have different eligibility guidelines, some may limit the number of employees, others will put limits on revenue or payroll. Some automatically include business income coverage, some require you to purchase this valuable coverage as an endorsement.

Retail stores, business, and medical offices, some classes of artisan contractors (electrical, painting, lawn care), small restaurants, various types of service providers may all be eligible -depending on the insurance company.