There are many varieties of insurance coverage for businesses. Some, like general liability insurance, are common to almost any business in any industry. Some are more tailored to specific professions such as errors and omissions insurance for accountants, lawyers and engineers. And then, there is specialized insurance that is specific to particular industries, like bobtail insurance for truckers. In this article, we’re discussing the pros and cons of a generic package of insurance for businesses commonly known as a Business Owners Policy or BOP for short.
First, What it Is
A BOP combines commercial liability insurance with property insurance. Therefore, a BOP will cover damage to buildings and equipment caused by fire, theft, or other disasters. Some BOPs may also include additional coverage, such as business interruption insurance. BOPs include types of coverage that almost all businesses need. Especially those businesses with a physical location or have equipment that could be damaged or stolen. In addition, if there is a possibility that you could be sued by your clients for damage caused by you or an employee, a BOP could be a good option.
Advantages of a BOP
Because a BOP combines more than one insurance type, there is generally a cost-saving for bundling multiple coverage types. That can be an excellent way to save some money if, in fact, the BOP is the right fit for your business. Many BOP insurance providers offer some flexibility to add other common types of business insurance, such as errors and omissions insurance, data breach or cyber insurance, etc.
Disadvantages of a BOP
While a BOP provides essential coverage that most businesses need, it could also be more insurance than is necessary for some businesses. For example, the BOP may cover property damage to the maximum amount stated in the policy. But, if you work with expensive equipment, the BOP may not adequately cover the replacement cost. Conversely, BOPs may include more coverage than you need. You could end up paying for bells and whistles that you’ll never be in a position to claim. In that case, you would be better off sticking with individual policies outside of a BOP.
BOPs are an excellent choice for many businesses without specific or out-of-the-ordinary requirements. But every business is different. So before purchasing a BOP, speak to an insurance broker. They can help make sure you get all the right types of coverage for your company in a package that fits your budget. Choose an insurance agency that works with a wide network of insurance partners so you can feel confident you have access to as many options as possible.
