By Catherine Powell
Running a business isn’t for sissies. That’s because there’s precious little that’s free in a free-market economy. Everything from rent and payroll to advertising and inventory add up. Then there are unforeseen situations that can stop a business in its tracks, like distribution bottlenecks and a little thing called COVID-19. If all that wasn’t enough, there are dozens of ways that you and/or your business can be held liable. Slip and fall accidents, worker’s comp issues, and errors & omissions can land you in court. While general business liability insurance can protect you against these situations, it’s not all-encompassing. Typically, this means you’ll also need to purchase a commercial property policy to cover your building and its contents from fire, theft, or acts of God. The alternative is to purchase a policy that combines both. It’s known as a Business Owner’s Policy, or BOP.
1. Outside In – Most business owners assume that their liability stops as soon as a customer or employee steps out the door. This couldn’t be further from the truth. If a slip and fall occurred in the elevator, the lobby, or the parking lot, you could find yourself getting sued by a customer or even one of your own employees. If that should occur, your general liability policy won’t help, since it only covers incidents that occur inside your business. A BOP covers medical bills and other expenses related to such an injury. (Does your current coverage do the same?)
2. Stop Thief – A BOP includes coverage for your building and its contents for starters. It also protects you from fraud and forgery. However, it can also be tailored to cover more than that. This means if you have furniture outside your place of business, you won’t have to worry that your property protection stops at the door. By opting for comprehensive coverage, it can also extend the protection to cover property stolen during a move or lost by an employee at a business show.
3. Timber! – If a tree were to topple onto the roof of your building, a BOP would cover the damage because it covers the physical structure. This protection could also extend to fences, signage, satellite dishes, antennas, or other equipment that are attached to the structure if you opt for extended coverage.
4. Did you accidentally spill coffee on a client’s laptop? – With a BOP policy, this is a covered peril.
5. Do you manufacture products? – A BOP protects you from product-related claims. This includes pollution cleanup as a covered loss, in case you experience a spill of toxic chemicals used in the production process.
6. What’s the difference between a BOP and general liability coverage? – While both policies offer protection from lawsuits, a BOP combines liability and property protection into one convenient package.
7. What happens if your business were forced to shut down unexpectedly? – No problem, since BOP policies even include business interruption coverage. BOP can help you pay your business bills and employee salaries in case of a shutdown.
8. What other options can be built into a BOP? – The beauty of a BOP is that it can be customized to provide the coverage you need most. Below are several coverage options:
a. Cyber insurance that protects your systems and the data contained therein. This includes both cyberattacks and the damage they can cause to both the hardware and your business software and data.
b. Equipment breakdown coverage pays to repair or replace office hardware that are damaged or destroyed. This means if you come into the office on Monday only to find out that your computer server was done in by a power surge, you won’t be forced to dig into your pocket to get it back in service.
c. Accounts receivable coverage protects the bottom line from unpaid invoices.
d. Advertising liability extends to cover you and your employees from such things as copyright infringement, libel and slander.
e. Does your company rent vehicles? A BOP can be tailored to cover any rental vehicles used by you or your employees on the company’s behalf.
f. Employment practices liability insurance covers wrongful acts arising from running a business. Like it or not, the number of lawsuits filed by employees and former employees has skyrocketed in the past few years. EPLI insurance covers your firm against sexual harassment and discrimination suits, as well as those stemming from wrongful termination, breach of contract, failure to employ or promote, infliction of emotional distress, and more.
9. What is excluded in a BOP? – While a BOP policy can be built to resemble something like an insurance industry variation of a Swiss Army Knife, it has its limitations. Below are some exclusions:
a. Your business must be located outside your home. SOHO businesses don’t qualify.
b. Your business must have less than 100 employees and gross less than $5 million.
c. BOPs do not include worker’s comp insurance, auto insurance, health insurance or disability insurance.
d. Make sure you ask your agent about limits, exclusions, and deductibles in regard to both regular and extended BOP coverage.
10. How much does BOP insurance cost? – That depends on the coverage chosen, but typical BOP policies start at rates below $100 per month. When you look at all the coverage that can be bundled into a single policy, you’ll be glad that a BOP can keep your business from getting bopped in so many ways.
Catherine Powell is the owner of A Plus All Florida, Insurance in Orange Park, Florida. To find out more ways to save on flood insurance, check out her website at http://aplusallfloridainsuranceinc.com/