Is a Business Owner’s Policy (BOP) Right for You?

Business owners have a lot on their plates: Providing a high level of customer service, finding new customers, dealing with inventory, paperwork, and tax documents – sometimes the list seems endless.

What about business insurance? Every business owner needs to ensure he or she has coverage to match unforeseen circumstances that arise from time to time. Unlike other items on the list, the right insurance – when set up properly from the start – brings you peace of mind and the freedom to run your business in confidence.

Typically, a business needs two types of insurance: General Liability and Property Insurance. Combining these two kinds of coverage into one policy is more cost-effective than buying them separately. The combined product is called a Business Owner’s Policy, or BOP.  Let’s explore what these policies cover.

The Liability portion of your BOP is intended to protect your business from expenses related to lawsuits. Suppose someone comes into your office and trips on a piece of carpet sticking up near the front door. Chances are good that person will seek the services of a personal injury attorney. Before you can say “litigation,” you find your business is being sued for medical expenses, lost time at work, and pain and suffering. This is where General Liability Insurance kicks in. It covers injury to third parties who suffer injuries while on your business premises. It also covers compensation for legal fees, such as attorneys, court costs, settlements, and medical expenses. These costs can escalate rapidly, and without proper coverage, you run the risk of business bankruptcy.

The other component of a BOP is Business Property Insurance.  This covers damage to your physical location, such as owned or rented space, additions, and storage buildings. It also covers personal, business-related property, such as phones, computers, tools, and more.

BOPs may include business interruption insurance as a part of property coverage, providing up to 12 months’ income if your business is forced to close temporarily because of a covered property event, such as a fire.

While a BOP package is more cost-effective than buying both types of insurance separately, there are other considerations.  Your business need are different from other businesses. You may need a higher level of protection. BOPs usually cover “named perils,” such as fire, explosion, wind damage, smoke damage, or vandalism. Depending upon your type of business, “open peril” all risk coverage may be available. Please ask us about open peril BOPs.

Another factor is whether your General Liability Insurance provides adequate protection for your specific risk of exposure. A million dollars worth of liability insurance might sound like a lot, but if your business is sued for higher amounts, say four or five million dollars, you will have to cover the difference.  Do you have the resources to cover that kind of expense? Even if you do, do you want to see years of hard-earned profit go down the tubes? Of course not! Here’s where a Business Umbrella policy can make up the difference.

Call Veazey Insurance today and let our experts find just the right policy and coverage for you. Be sure to ask about your BOP options, and whether a Business Umbrella is right for you.  At Veazey Insurance Agency, we’ve got you covered!