What a Business Owner’s Policy Covers (And What It Leaves Out)
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What BOP Insurance Covers, What it Leaves Out

Say you’re a quintessential book lover. As a lifelong, avid reader, you decide to open a bookstore and call it “Boppin’ Bertie’s Books” (after your great aunt Alberta, naturally). And not only are you book smart, but you’re also street smart – you know your business needs insurance if it's going to survive unexpected disasters.

Based on your extensive research, a Business Owner’s Policy seems to be the way to go. A discounted insurance package that bundles two essential policies for small, low-risk businesses? That’s a no-brainer. But as a refresher, let's explore what a BOP does and doesn’t cover.

The BOP from Cover to Cover

A Business Owner’s Policy is an affordable insurance bundle that packages General Liability Insurance and Commercial Property Insurance together. These policies build a solid foundation of protection against losses your business may face.

With General Liability Insurance, your policy can cover your lawyers’ fees, settlements or judgments, and other court costs if you’re sued by a third party (i.e., anyone who doesn’t work for your business). It steps in when your business is sued over…

  • Bodily injuries. Books are stacked to the ceiling at the end of each aisle in your bookstore. If a leaning tower of reference books tips over onto a customer, you won’t need a dictionary to look up “personal injury lawsuit.”
  • Property damage. Maybe your bookstore boasts excellent vintage book appraisal services. A client leaves a 200-year-old family heirloom Bible with you for an assessment, but you accidentally spill coffee all over the weathered pages.
  • Advertising injuries. Infuriated that a competitor is luring customers away, you write a scathing post on your bookstore’s Facebook page about the other business. Your competitor is not amused and slaps you with a libel lawsuit.

The other side of the BOP coin offers Commercial Property Insurance that can pay to repair or replace business property that is stolen, lost, or damaged by…

  • Fire. Faulty wiring sparks a fire in your shop overnight, burning your entire book inventory to a crisp.
  • Vandalism. Hoodlums deface your storefront window with spray paint in giant block letters that proclaim, “Books are for nerds!”
  • Windstorms. A strong wind blows through town, causing a tree to fall on your shop.
  • Some weather events. Not all weather events are covered by a standard BOP. For example, floods, earthquakes, and other natural disasters are usually excluded.

Your policy can cover your essentials, such as your retail space, office equipment, inventory, and supplies.

Business Owner’s Policy Appendices: Riders and Endorsements

The BOP's standard coverages aren’t the last word on its protection. Business Owner’s Policies can be customized with riders or endorsements. A rider is additional insurance protection you can purchase separately and “tack on” to your primary policy. It’s the perfect way to adapt your BOP to meet your unique needs. Some common BOP riders are…

  • Business Interruption Insurance. If a covered Property claim forces your business to close its doors temporarily, this coverage can help you pay for ongoing expenses (e.g., payroll, rent, and taxes) when you can't generate revenue.
  • Cyber Liability Insurance. If your business experiences a data breach, your policy can protect you from the exorbitant cleanup costs. It can cover the cost of notifying affected parties, offering credit-monitoring services, and patching your security.
  • Commercial Auto Insurance. If your business owns a vehicle, this coverage can pay for medical costs, repair costs, and legal expenses related to an accident.

Talk to your insurance agent about your options.

The Exciting Sequel to BOPs

A Business Owner’s Policy is a good starter insurance package, but it doesn’t cover everything. And not every insurance policy can be added as an endorsement. As your business grows, you may need additional policies, such as…

To learn more about the ins and outs of BOPs, read “What Does a Business Owner’s Policy Cover?

Business Owner's Policy: Further Reading