Business owner policy(BOP) is an insurance policy where the primary risks are covered in a single package. The package includes both general liability and property claims.
This package is tailored to cater to the insurance needs of small and medium-sized enterprises(SMEs). It is most suitable for companies that are susceptible to property damage, theft, and legal battles.
The insurer sets the risks covered under a package. However, insurers are adopting more flexible models. In these models, the insured can add more risks to the BOP package depending on their unique needs.
Some of the covers bundled in BOP include;
1. General Liability Coverage
This cover includes the expenses that arise when businesses are sued. Businesses are sued for many reasons. Some of the risks under general liability coverage include non-employee injuries, damage to rented property, copyright infringement, and advertising mistakes. Some insurers include attorney fees in their general liability coverage.
2. Interruption Coverage
Under this coverage, the insurer protects a company from losses that occur due to interruption of its productive activities. This coverage is often tied to the commercial property coverage. The insurer compensates the company for the income lost during the disruption. It may also cover extra expenses resulting from the interruption.
3. Commercial Property Coverage
This coverage protects businesses from damage to the property they own. The common risks under this cover are fires, theft, and natural disasters.
4. Data Breach Coverage
This coverage shields the insured from losses that occur when business data is compromised. Cyber attacks are included in this coverage. This coverage also includes the legal fees in case the firm is sued for the breach.
5. Professional Liability
This covers liability that results from omission and commission errors in the line of duty. It also covers the legal expenses that arise from such errors.
Advantages of BOP
The cost of BOP is lower than the total cost of the coverage included in it. Therefore, it saves money. BOP is also convenient. This is because it can be adjusted to cater to specific needs.