When your clients shop around for small business insurance through an insurance agent or an insurance agency, they’ll have the choice of buying general liability insurance as a stand-alone policy or as part of a BOP. However, a BOP may not be the right option for every small business client. Here’s what insurance agents need to know.
Despite its playful nickname, a BOP—or business owner’s policy—can be an important safeguard for your small business clients.
When your clients shop around for small business insurance through an insurance agent or an insurance agency, they’ll have the choice of buying general liability insurance as a stand-alone policy or as part of a BOP. However, a BOP may not be the right option for every small business client.
Typically, a business owner’s insurance policy includes:
General liability insurance, which protects small businesses from claims if someone is accidentally injured at the business or by using the company’s products or services. This means that if your client is sued due to bodily injury, property damage or advertising claims, his or her general liability insurance will pay for their legal defense and any settlements or court judgments up to the policy’s liability limit.
Landlords, lenders, licensing boards, and some business clients often require general liability insurance.
Commercial property insurance, which protects a company’s equipment, inventory and bricks-and-mortar location. This includes both owned and leased business equipment.
Business interruption insurance, which replaces any income a business loses if it needs to close temporarily due to a hurricane or fire. Also called business income insurance, this type of coverage won’t pay for income lost due to an event not covered by the policy.
In general, BOPs are designed for businesses:
Insurance companies look at several factors to determine if a business is eligible for a BOP, including its:
Businesses like restaurants may not be eligible for a BOP because of the specific risks inherent in the business.
Because of these parameters, your clients in some industries will need to buy individual policies instead of a BOP. In general, businesses in the following industries are not eligible for BOPs:
While combining three insurance policies into one business owner’s policy can be convenient and may save a client money, it’s important to note that most businesses will still need additional coverage from an insurance agent to be adequately protected. For example, general liability insurance doesn’t protect against workplace injury claims suffered by employees or others on the payroll. For this level of coverage, a small business client will need workers’ compensation insurance.
Your BOP clients may also need:
The benefit of working with an insurance agent is that a small business owner can get a personalized quote for the coverage needed for their specific business and circumstances.
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