BOP policies (short for business operations policy)
Before answering the question what a BOP does not cover let’s talk about the BOP for a minute. BOP Policies are a great way to protect small and medium size business owners from many unfortunate losses.
The BOP has a combination of coverage for both major property and liability risks – it is nice that combination together offers an all in
one insurance policy package.
A BOP can be cheaper than buying two policies separately.
Generally the BOP covers property insurance for buildings and contents, business interruption coverage, and liability protection for losses caused by the business owner or her employees.
My warning to business owners about the BOP is that it is NOT an all risk policy like the standard form Commercial General Liability.
In an all risk policy, generally all risks are covered unless excluded by specific policy language. On the other hand, a BOP policy is a covered-peril policy. It only covers those perils specifically set out in the policy terms.
What Does a Business owners Policy (BOP) Cover?
- Property insurance for buildings and contents owned by the company — there are two different forms, standard and special, which provides more comprehensive coverage.
- Business interruption insurance, which 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.
- Liability protection, which covers your company’s legal responsibility for the harm it may cause to others.
- This harm is a result of things that you and your employees do or fail to do in your business operations that may cause bodily injury or property damage due to defective products, faulty installations and errors in services provided.
What Don’t BOPs Cover?
Business Operations Policies don’t cover:
- professional liability
- auto insurance
- worker’s compensation
- health and disability insurance.
You’ll need separate insurance policies to cover professional services, vehicles and your employees.
Give us a call at Universal Insurance Agency in Worcester, MA for us to give you a quote or to look over the policy you have to make sure you have what you need.