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Business Owners Policy (BOP)

Business Owners Policy (BOP) Overview

A Business Owners Policy (BOP) combines General Liability insurance and Property insurance in a single commercial insurance policy. For many growing companies, BOPs offer great small business insurance coverage at very competitive premiums. This type of policy package is generally available to small to medium-sized businesses operating in a low-risk business class.

General Liability and Property Package

A BOP consists of the following 2 insurance coverages:

General Liability:

General Liability coverage is the most basic type of commercial insurance and is limited to liability claims of bodily injury or property damage. Coverage is provided for accidents on your premises or at your customer's location. Some client contracts also refer to these policies as Comprehensive Commercial Liability. Please refer to the General Liability section for more information.

Business Property Insurance:

Even if you run a home-based business and have home insurance, you will need to protect your business assets with separate contents and computer insurance; your home owner's policy probably will not cover business equipment.

Property insurance (for small businesses as well as large ones) protects business property and inventory (assets) against physical loss or damage by theft, accident or other means - even if that property is removed from your place of business when it is lost or damaged. Property coverage for small business insurance can cover your costs to repair or replace what you've lost and, in some cases, compensate you for items that are physically irreplaceable. Because every business is vulnerable to property damage or loss at any time, this insurance is one of the first things you should buy when you start a business.

Property coverage in small business insurance can be structured several ways, and the premiums you pay are based on how comprehensive your business insurance coverage is.

If you do not own your building, you will simply need contents coverage. In the most basic policies, property insurance for small business contents covers furniture, fixtures, inventory, office equipment and other supplies stored at your facility or off-premises. You may insure those items for replacement cost (which means you will receive a settlement based on how much it will cost to replace the items at today's market prices) or for actual cash value (ACV), which pays only for the depreciated value of the property. Although replacement cost insurance policies have higher premiums, they may help your business recover from a loss faster, since you can replace all of the lost or damaged property with new items.  For this reason, most insurance professionals will recommend buying property coverage insurance for small businesses on a replacement value basis.  Also, if you lease some of the equipment at your facility, your leaseholder may require that you insure the property at replacement value. However, if your business owns its own equipment and could easily purchase any equipment it might lose at the depreciated market value, the lower premium of an ACV policy might be a better value.

Below are just a few of the important ways business property coverage can help you in the event of a loss. (Some coverages may not be available on all policies or in all states)

  • Business Income:  Reimburses you for your actual loss of earnings for up to 12 months resulting from a covered loss to your property. Also covers extraordinary expenses you incur in order to continue operations after a covered claim.

  • Computers & Media:  Provides coverage for your computers, peripheral devices and media. Coverage is also provided for the costs to research, replace or repair lost or damaged data and software as a result of covered damage to computer equipment, certain power failures, or a computer virus. Business Income Coverage, if purchased, also applies to computer equipment, data and software.

  • Business Personal Property Insurance (Contents):  Provides coverage for furniture, fixtures, merchandise, materials and all other personal property owned by you and used in your business. Coverage is at replacement cost.

  • Property of Others:  Protects you against loss or damage to the property of others that is in your possession at a job site or on your premises. This coverage would respond to claims for accidental damage to customer equipment in your care, custody or control. If you are involved in computer installation, system integration or network maintenance, this coverage can be essential.

  • Laptop:  Up to $10,000 for laptop computers, PDAs and similar portable computer equipment anywhere in the world, including while in transit. (Not covered if checked as baggage)

  • Equipment Breakdown:  Covers the cost to repair or replace equipment, such as computers, air conditioners, phone systems and steam boilers, following a loss or damage caused by mechanical breakdown or artificially generated electrical current.

  • Lock and Key Replacement:  Pays for re-keying of locks, up to a specified limit, at your business premises following the theft of your keys by a burglar.

  • Money and Securities:  Protects money and securities used in your business if they are stolen, destroyed or lost.

Note: This summary outlines in general terms the coverages afforded under some policies. Examine the policy carefully for any exclusions, limitations, or any other terms or conditions that may specifically affect coverage. The terms and conditions of the policy prevail.

Completing Your Package:

Business Owners Policy insurance is often not comprehensive enough to cover every eventuality, and other insurance plans are required for complete protection. Most business owners who purchase Business Owners Policy insurance from Ben Lau Insurance Agency also purchase:

  • Errors and Omissions

  • Commercial Auto

  • Group Health

  • Group Life

  • Directors and Officers Coverage

  • Umbrella Policies

For more information please call us at (415) 876-5440.  You can request a free quote here.


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