The Business Owners Policy or BOP consists of two coverage parts – Property and general liability and provides coverage for main street business’.

Property 

Covered Property:  Building and structures, completed additions, permanently installed equipment, business personal property, fixtures, tenant improvements and betterments, and exterior building glass.  There are 3 types of BOP Property coverage forms.  Coverage is written on an open peril (all risk) type basis. This provides the broadest coverage and do not list covered perils but include a list of what perils are not covered.   The form places the burden on the carrier to show that a specific exclusion applies.

Property Coverage Limit:  Property coverage is written based on replacement cost of item.

Business Income Extra Expense:  Applies to losses of business revenues as a result the time required to repair or replace the damage property. Coverage amounts can vary by carrier.

Building Ordinance/Law:  Provides coverage to bring a building up to code after a covered cause of loss.  There are three parts to this coverage and they are; Coverage A provides for loss to the undamaged portion of the building. Coverage B provides for the cost to demolish and remove the undamaged portions of the building but only if the destruction is due to the building code or ordinance imposed following a covered loss. Coverage C provides for the increased costs to repair or rebuild the property to comply with current building, zoning or land use ordinances or laws.

Deductible: The limits of property coverage are shown on the declarations page.  All BOP policies contain deductibles.  They apply to both Building and business personal property.  For a loss to be paid the loss must exceed the deductible and the insured is responsible for paying the deductible.

Property Coverage enhancements:  Some of the following coverage enhancements may be included into the Business Owners policy however, coverages and limits vary by carrier and you should discuss this with your agent.  Coverage enhancements can include debris removal, preservation of property, fire department service charge, collapse, certain water damage, business income, extended business income, extra expense, pollutant clean up and removal, civil authority, money orders and counterfeit paper currency, forgery or alteration, increased cost of construction, business income from dependent properties, glass expense, and fire extinguisher systems recharge expense.

Liability 

Business liability:  Covers the sum of money the insured is legally obligated to pay to others because of bodily injury or property damage caused by an occurrence.

Occurrence:  An accident, including continuous or repeated exposure the substantially the same general harmful conditions.

Bodily Injury:  Pays arising from bodily injuries caused to others by the policyholder’s action(s).

Property Damage:  Physical injury or destruction of tangible
property caused by either an individual who is not the owner of said property or by natural phenomenon. 

Personal injury or advertising injury: Covers items such as false arrest, malicious prosecution, violation of privacy, libel slander, copyright infringement and wrongful eviction.

Medical payments:  Pays medical expenses to third parties for expenses incurred at the insureds premise or arising out of the insureds operations.  Medical expenses ae paid regardless of fault.

Damages to premises rented to you (Fire Legal Liability):  The most paid for property damage to premises rented to or temporarily occupied by the insured with the owner’s permission if damage arises out of fire or explosion.

Products and Completed operations:  Liability arising out of the insured’s products or business operations conducted away from the insured’s premises once those operations have been completed or abandoned.

Liability Limits:

Per Occurrence Aggregate: The most a policy will pay out for any one occurrence in the policy period (No matter how many claimants).  The recommended limit is $1,000,000 aggregate.

Policy Aggregate: The total amount of coverage paid out in any one year.  Typically, this limit is double the per occurrence aggregate.

Personal and advertising injury: The limit for this coverage always matches the per occurrence limit of the liability.

Damage to Premises Rented to you: The most common limit for this coverage is $50,000, however, this can vary by carrier.

Medical Expenses:  The minimum limit offered is $5,000.  This may be increased depending on the carrier.

Liability Coverage Enhancements 

Some of the following coverage enhancements may be included into the Business Owners policy however, coverages and limits vary by carrier and you should discuss this with your agent.

Cyber Liability: Coverage for liability caused by conducting business over the Internet, other networks or using electronic storage technology.  Insurance can be bought for losses against both the first- and third-party risks. 1^st party coverage is when your own information is breached and 3^rd party liability is when your clients’ information is breached. 

Employment Practices Liability: Coverage for liability resulting from employment practices.  Employment practices deals with wrongful termination, discrimination, invasion of privacy, false imprisonment, breach of contract, emotional distress, wage and hour law violations and sexual harassment. 

Employee Benefits Liability: Provides coverage for an employer for an error or omission in the administration of an employee benefit program, such as failure to advise employees of benefit programs. 

Hired and non-owned: Provides coverage for bodily injury and/or property damage caused by a vehicle you rent or borrow or caused by a non-owned vehicle such as an employees vehicle.   

Additional insured clauses: A type of status associated with the liability portion of the policy.  This provides coverage to other individuals/groups that were not initially named as a named insured on the policy.  Once added to the policy, the additional insured will then be protected under the named insurer’s policy and can file a claim if they are sued.