What does a business owner’s policy (BOP) cover?

A small or midsized business is generally looking for coverage that is simple, compact and easy to understand, that is why the insurance industry developed the BOP package policy.  A BOP policy will combine protection from all major property and liability risks into one package.

Business Owner’s Policies hold protection for three basic coverages, the first being property insurance.  The property that is included on a standard BOP policy will include the structure or building in which the business is being conducted as well as the business contents that reside in the structure.  Coverage can be established on a standard or a special coverage limitation, the latter being a much broader coverage base.

The second portion of a BOP policy will cover “business interruption insurance”.  More simply stated, this will grant coverage to the insured, should the business be incapacitated due to a covered peril, such as a fire.  This will cover the loss of income, as well as the cost of operating from a temporary location.

The final portion of a standard BOP policy will include liability protection.  Much like that of a homeowner’s or auto insurance policy, this section will cover the business owner should they be liable for the harm to others or their property.  This will grant coverage in the event that the business or employees of the business do something, or fail to do something that causes harm to another.  This may also include coverage for defective products, faulty installations or errors in service.

Are my business vehicles covered under my car insurance policy?

Your personal car insurance policy will cover all of your vehicles that are used for personal means, including getting to and from work.  They will not cover vehicles that are registered under a business’ name, or those that are driven by employees for work related transportation.  Generally, if the vehicle in question remains at the business location, or has the business’ name printed on the vehicle, you should have it insured as a business vehicle.  This type of policy will also be needed in the event that a vehicle is being used for delivery purposes.  A business auto policy carries coverage very similar to your personal auto policy, but there are some special exclusions, so be sure to see your agent with any questions.

What if one of my employees is injured on the job?

Each and every employee has the right to work in a safe and secure environment, and it is the employer’s responsibility to maintain this type of environment.  No matter how safe or protected the workplace might appear, accidents still happen and that is why business owners with employees must carry workers compensation insurance.

A workers compensation plan will cover employees while on the job, on the clock, whether or not they are on the premises.  The policy will grant coverage for any and all injuries sustained while working, as well as work related illnesses obtained, or injuries resulting from an auto accident while on the clock.  Employees will receive compensation regardless of fault for lost time from work, medical and rehabilitation services, as well as death benefits.  A workers compensation policy is not included in a BOP package policy and must be purchased separately.  See your agent for state specific laws and regulations.