Business Owners Policy Overview
Business Insurance Liability and Small Business Property Insurance
Jun 24, 2006
The Business Owners' Policy (BOP) is a commercial business insurance policy that provides coverage for property, liability and hired auto (e.g., rental cars, borrowed cars). The small business property insurance section of the Business Owners Policy (BOP) provides protection for a building and its contents. The commercial business insurance policy repairs or replaces items damaged due to a covered loss in a building that is owned or rented for a business.
The list of items covered by small business property insurance typically includes:
1. Inventory is included in the commercial business insurance policy;
2. PCs should have coverage in the policy;
3. Equipment owned or leased is also covered by the commercial business insurance policy;
4. The small business property insurance form also covers furniture and fixtures;
5. Money or securities are covered by the BOP;
6. The commercial business policy includes coverage for personal belongings;
7. Property being held for someone else is included in the business owners' policy;
8. Records are also covered by the commercial business insurance policy.
The BOP also provides small business insurance liability coverage to protect a business in case it is sued. The commercial business liability policy includes coverage for personal injury, bodily injury, property damage and (often) advertising injury.
The small business property insurance policy excludes Wear and Tear, Mechanical Breakdown, Pollution, Nuclear Contamination, Flood and Earthquake. Detached buildings, signs and fencing are most likely excluded from the BOP but probably can be added on to the policy or covered by a separate insurance policy. Company cars owned by a business should be insured separately from the small business insurance policy. Other coverages may be included or added on to a business insurance liability policy depending upon the line of business. Internet liability insurance is a must if a company has a website.
What Should Be Added to a Commercial Business Insurance Policy?
- Crime coverage- for theft and employee dishonesty;
- Errors & Omissions (E&O)- Protects the owner from catastrophic claims due to negligence;
- Mechanical Breakdown- Losses resulting from equipment breakdown;
- Extra Expense- Costs to get the business up and running again ASAP after a loss.
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