A Business Owners Policy (or BOP) is a combo of three types of coverage recommended for business owners: Property, General Liability and Business Interruption. Of course you could buy each of these individually (or, as the French say, “à la carte”), but you’ll usually save money and get better coverage with a BOP.
Lawsuits happen. General Liability coverage prepares you for lawsuits connected to three aspects of your business:
That means the work you regularly do. Do you install computers? That’s a “continuing op.”
The products you sell or jobs you’ve finished. The computer you left behind is a “completed op.”
Words and images used to promote your business. If another company claims you stole their copyrighted slogan, that’s an advertising injury.
If something happens that prompts a lawsuit, you’ll be covered starting on the date the occurrence took place. Keep in mind your policy will have a payout limit per occurrence – and a total payout per year.
This coverage helps you replace your property after a loss. If you buy coverage outside of a BOP, you can choose from 3 levels of coverage: Basic, Broad and Special. The first 2 only cover specific types of damages. Special is the most comprehensive, covering any kind of damage as long as it’s not specifically excluded. (We’ll come back to that.)
Good news: If you’re a BOP holder, you’re Special! So when fire, theft, vandalism, volcanic eruptions or civil commotion come along (hopefully not all at once), you’ll be covered for damages to:
The physical space you own or rent, including permanently installed items and additional structures elsewhere on your property
Most of the things in your space - including furniture, supplies, inventory and unfinished products
Now remember those exclusions we talked about? Some of the things your property coverage won’t automatically help with include:
With a BOP, your agent can add all of these coverages back in.
Annnnd …. one last complication. Some other types of property aren’t excluded but come with “sublimits.” Untangling the terminology, that means there’s not an especially big payout if they’re damaged. These include:
It’s important to know what the sublimits look like in your policy – and raise them if it makes sense for you and your stained glass window factory.
This helps you cover the loss of work time if you have property damage. (As long as your property insurance covers the type of damage.)
Let’s say you own a beauty salon. If a fire hits, you’ll probably lose income while you find a new space, chairs and other equipment – and your clients take their hair elsewhere. Even if you run a software company and store everything you need on the Cloud, you may still have to rent a temporary office space.
Business Interruption covers you for your Actual Loss Sustained (ALS) – the amount of income you can show that you lost. Some policies also cover you for extra expenses – like an inability to fulfill a contract on time.
Bottom line: you should probably shop for a BOP. (Also, BOP is fun to say. We won’t judge.)
With a BOP, you have additional options for extending the coverages that make the most sense for you. Mylo’s licensed insurance advisors are pros at knowing the specific types of damages that happen in your industry. Get a custom consultation on the right coverage for you.