What Is a BOP Insurance Lawsuit?
As you know, a Business Owner's Policy is a combination of General Liability Insurance and Property Insurance. The General Liability Insurance portion a BOP protects you from lawsuits brought by people (aka "third parties") outside of your business, such as a client, customer, or delivery person. While a BOP cannot cover all types of lawsuits, the ones it does cover are among the most common.
Can a Business Owner's Policy Shield Me from Lawsuit Costs?
Yes, BOPs protect small-business owners from having to pay the full cost of a lawsuit out of pocket. Lawsuits are expensive. In the best case scenario, the suit is dropped and you're only responsible for paying a couple thousand dollars in lawyers' fees. But if the suit is not dropped, your costs go up from there. A BOP suit can potentially cost a business owner upwards of $1 million.
Most BOPs offer $1 to $2 million in lawsuit coverage. In this way, the BOP can prevent small-business owners from being forced into bankruptcy by their legal expenses.
Business Owner's Policy Lawsuits: Which Lawsuits Does a BOP Cover?
BOPs cover lawsuits when third parties sue your business over…
- Property damage.
- Injury to their reputation (such as libel and slander).
- Physical injury.
- Slip-and-fall accidents.
- Product liability.
- Advertising injury (such as copyright infringement).
When a lawsuit is covered by your insurance, the insurance company picks up the tab for your legal expenses, which often includes…
- Lawyers' fees.
- Witness fees.
- Judgments (when a judge orders you to pay damages).
- Other court fees.
BOPs also cover "settlements," which occur when you and the injured party agree outside of court on a payment for damages. Many lawsuits end in settlements, so this coverage is important. It can help you resolve a lawsuit much faster.
Examples of Business Owner's Policy Lawsuits
Here are two examples of lawsuits that a BOP can cover. In each of these news stories, a business or non-profit is being sued by someone who was injured on its property:
- Macy's is sued when a customer slips on a fallen sign. A browsing customer stepped on a plastic sign that had fallen on the ground. She slid on the slick surface and tumbled to the floor, breaking her arm. The compound fracture required surgery, and she sued Macy's for $100,000 in damages plus additional costs.
- A local church is sued over an icy parking lot. When one of the churchgoers walked out to her car as the service ended, she slipped on a mixture of snow, injuring her ankle and shoulder in the fall. The lawsuit claimed the church was negligent, arguing it was to blame because the parking lot was poorly designed, and the church personnel had failed to remove snow and ice in a timely fashion.
What do these examples tell you? First off, they tell you that no one is safe. Not even a church. Second, these examples reveal how one unpredictable accident can come with a six-figure legal bill.
The thing you might not realize is that lawsuits are expensive even if you win. You still have to pay your lawyers' fees, after all. And many lawsuits take a year or more to go to trial. In that duration, your lawyers are working to prepare your case.
You'll have to pay months of legal fees before the trial even starts. These expenses cause many small-business owners to go into debt, lay off employees, or make other hard decisions.
Fortunately, a Business Owner's Policy can protect your business from the exorbitant cost of a general liability lawsuit. When you are ready to get coverage, fill out our online insurance application for a free customized Business Owner's Policy quote.