What Is a Business Owners Policy (BOP)?
A business owner’s policy (BOP) can insure small and medium-size businesses against multiple business perils by providing property, liability, and business interruption insurance coverage. It is a type of commercial package policy and is designed for relatively small retail businesses, certain processing and service businesses, and businesses that operate out of small office, condominium, or apartment buildings. The typical landlord or business owner who has a business owner’s policy has a single location business, with predictable risks and, at most, a moderate level of insurance exposure. The property coverage includes buildings and business owned personal property. The liability coverage includes bodily injury, property damage, personal injury, and advertising injury.
What Types of Businesses are Typically Eligible for a BOP?
The types of businesses that typically can obtain a BOP include:
- Appliance repair shops
- Dental laboratories
- Funeral homes
- Hair salons
- Laundries and dry cleaners
- Photocopying centers
- Shoe repair shops
- Watch, clock, and jewelry repair shops
What Types of Businesses Aren't Eligible for a BOP?
The following types of businesses have risks outside the scope of a business owner’s policy and thus are ineligible for this coverage:
- Banks and other financial institutions
- Auto dealers and repair shops
- Amusement parks
What Is the Structure of a BOP?
The structure of a BOP involves four parts: declarations, policy conditions, a business owner’s liability form, and either a standard or special property form. The declarations and conditions are much like those for a commercial package policy. The liability form, as mentioned above, covers bodily injury, property damage, personal injury, and advertising injury. You have the option of either a standard property form that insures against specific named perils, or a special property form that offers open peril coverage.
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