Small business owners or practice owners considering BOP insurance for their business.

Business Owners' Policy: Critical for Your Business

Every business should have a business owners' policy (BOP) to help protect its assets.

A business owners’ policy (BOP) is vital insurance protection for your practice or business. It combines general liability insurance and business property insurance. When it comes to medium to small business insurance for practices or other businesses, it’s generally a good fit.

Having both kinds of business insurance coverage in one policy is often less expensive than two separate policies, which helps with your business insurance cost.

What Does BOP Cover?

A business owners’ policy is usually broken down into 3 facets:

1. General Liability

General liability insurance provides coverage if you are sued by others for bodily injury or damage to their property that happens during business operations. An example of this is if a patient slips and falls at your place of business. It also covers things like libel, slander or advertising misprints.

Product liability also falls under this portion of BOP coverage. If you're a medical or dental practice, for example, this is important if you are reselling supplements or orthotics under the original label and not relabeling. (You may need a separate product liability policy if you are relabeling and selling or manufacturing products under your own business name.)

2. Commercial Property Insurance 

If you have damages or loss as a result of a fire, theft or other covered event, this covers the building or business space, as well as items that your business owns and uses. This includes equipment, office furniture, computers, inventory, and more.

Note: If you rent a building or space, your belongings are NOT covered by the building owner’s property insurance. It’s important to have your own coverage.

3. Business Income Insurance

This part of a Business Owners’ Policy is also called Business Interruption Insurance. If you have to close your business because of a covered claim, this coverage may provide benefits to replace income you would have made during that time. It can also cover costs incurred if you have to move to a temporary location.

Additional Coverage

Often, other types of protection can be added to a business owners’ policy for an additional premium. Examples include:

Data Breach Insurance: If a data breach occurs, this type of insurance can help cover expenses related to notification, data recovery, credit monitoring services, defense costs, civil awards, settlement or judgements and more.

Employment Practices Liability Insurance (EPLI): EPLI can help protect your business from many types of employee lawsuits such as discrimination, sexual harassment, wrongful termination, breach of contract and more.

Hired & Non-Owned Auto: This provides liability coverage for auto exposures not owned by you while used for company business. “Hired” means the vehicle is rented, leased, hired, or borrowed for company business. “Non-Owned” generally describes an employee using their personally owned vehicle that is not owned, leased, hired, rented or borrowed by the named insured for company business. 

What to Look For

When choosing a business owners’ insurance plan, be sure it provides enough coverage to:

  • Rebuild your property and replace your equipment
  • Keep your business open
  • Protect your assets from a lawsuit

Make sure you understand exactly what is covered to determine if you need to add additional coverage to your BOP or get other standalone policies.

Note: One thing you should always ask about is Water Back-up and Sump Overflow coverage. Some insurance companies automatically include it in a BOP plan, others will not.

Business Owners Insurance Policy Exclusions

As with all insurance, there are some things not covered by business owners’ insurance. Exclusions often vary depending on your geographical location. When you’re comparing policies, know exactly what is excluded. If you need coverage for that particular exposure, you can try and secure it in a separate policy.

We're ready to help you find a business owners’ policy that fits your needs. We work with the nation’s leading insurance companies and can offer you options in coverage and price.

NCMIC Insurance Services is a licensed insurance agency. Insurance coverage is underwritten through many of the nation's leading insurance carriers. CA license #0B84564. In NY: NCMIC Insurance Agency. In MI: NCMIC Insurance Services Agency, Inc.

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