A business owner policy (BOP) combines protection for major property and liability risks in one insurance package. A BOP typically protects business owners against property damage, business interruption, and liability. Not all businesses qualify for business owner’s policies. Eligibility requirements differ among providers. Insurance providers determine if a business qualifies for a BOP based on business location, the size of the location, the class of business, and revenue.
While coverages vary among insurance providers, businesses can often opt-in for additional coverage, such as crime, spoilage of merchandise, forgery, fidelity, and more. A business may qualify for special considerations if it meets certain eligibility qualifications. A business owner policy (BOP) is a package that bundles basic insurance coverages and is sold at a premium that is less than the total cost of the individual coverages.
Business owners insurance typically includes property, business interruption, and liability insurance. The property insurance portion of a BOP is usually available as named-peril coverage, which provides coverage only for damage caused by events specifically listed in the policy (typically fire, explosion, wind damage, vandalism, smoke damage, etc.).
Some BOPs offer open-peril or “all-risk” coverage; this option is available from the “special” BOP form rather than the “standard” type of BOP. The BOP will also cover any business-owned items or items owned by a third party but kept temporarily in the care, custody or control of the business or business owner.
With business interruption insurance included in BOP, the insurer covers the loss of income resulting from a fire or other catastrophe that disrupts the operation of the business. It can also include the extra expense of operating out of a temporary location.
BOPs with liability protection will have the insurance company cover the insured's legal responsibility for damages it may inflict on others. This damage would have to be a result of things done in the normal course of business operations, which may cause bodily injury or property damage due to defective products, faulty installations and errors in provided services.
A business owner policy might also include crime insurance, spoilage of merchandise, computer equipment, mechanical breakdown, and forgery, but the coverage limits for these inclusions are typically low. Depending on a business' individual situation, the business owner and the insurance company may make arrangements for additional coverage components.