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Do I Need a Business Owners Policy (BOP)?

4 Reasons Business Owners Should Consider This Coverage

What is a business owners policy? A business owners policy — also known as a BOP — is an insurance policy that combines general liability coverage and commercial property coverage into one bundled package. BOPs are geared toward small and midsized businesses and offer typical coverages most businesses want or need.

Do you need a BOP? Here are four reasons to have one.

1. Flexibility

Having a BOP is good for small businesses because this policy is standardized, yet fully customizable. For example, a new flower shop in Spokane essentially runs the same risk of exposure to loss as a flower shop in Kent, and so the BOP each could purchase would more or less be the same.

That being said, each flower shop’s owner could purchase add-on options that are vastly different but speak to what they think is the smartest way to protect the business. Perhaps the Spokane owner buys employee-dishonesty coverage while the Kent owner opts to add on enhanced business-interruption coverage.

Think of a BOP like purchasing a car — you know you want to have four doors, and it’ll need an engine and wheels, but what else do you want to add on to make it yours? What can you get that matches your needs? A sunroof? Leather seats? A BOP is the base foundation of your business insurance, and all the add-on options are your upgrades.

2. Add-On Coverages

A wide range of add-on options are available to BOP owners, from crime coverage to cyber liability.

Cyber liability is one of the newest threats facing businesses. Whether you’ve been forced to deal with data breaches as a customer or just read about them in the news, you know that cyber security is important. If you don’t keep consumer data, then this is not as important of an issue for you. If you maintain any sort of private, financial or potentially ruinous data, adding cyber liability to your BOP is a must.

Some BOPs come with partial cyber liability included. Depending on the extent of data your business keeps, however, you might want to add additional cyber-liability coverage to your BOP.

3. Saving Time

The various coverages included with a BOP fall under one policy with one premium, which means if a business owner has multiple insurance-related incidents, they can be addressed at once instead of having to file multiple claims.

Think of this scenario: a Seattle restaurant owner notices that the restaurant’s exterior sign is beginning to warp and there is a leak inside the front door, after a week of daily rain. Before fixing the leak, a customer slips and decides to sue the owner for his or her injuries. Then the owner closes the restaurant for several days to fix the damage.

Your BOP could cover the costs to repair the water damage, fix the warped sign, replace the lost income while the restaurant closed, and cover the legal expenses of the lawsuit — all handled under a single claim.

4. Saving Money

Like bundle packages for cable and internet or your family cellphone plan, a BOP can be less expensive than separately purchasing the BOP’s individual components.

How much your policy costs depends on your industry, the risk of loss, and the amount of add-on coverage you select. The most important thing is to make sure your business has enough coverage to help it recover from a major loss, be it a fire, theft or data breach.

– Written by Marc Zarefsky

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