Misconceptions about Business Owners Policies

There is a lot of good information about business insurance out there, but there is a lot of misinformation, as well. As with any insurance, a business owners policy faces many misconceptions and misunderstandings.

A BOP Covers Everything

A business owners policy (BOP) is a policy that combines coverage for a business. At its most basic, a BOP combines general liability insurance and commercial property insurance. While this policy is flexible and allows you to add coverages, it doesn’t cover everything. There are a few coverages that cannot be added to a BOP, such as workers compensation. These coverages must be purchased separately.

BOPs Aren’t Flexible

While there are certain exclusions to what you can add to a BOP, the policy is generally pretty flexible. Specific coverages and their limits may be adjusted on your BOP to fit your business’ needs. No one BOP is the same because no one business is the same. Among the coverages you may add to a BOP, some include:

Professional Liability: Professional liability insurance covers acts of professional negligence that may cause a client to lose money.
Cyber Liability: Cyber liability insurance protects a business from expenses related to cyber attacks and the loss or destruction of electronically stored information.
Business Interruption Insurance: Business interruption insurance helps cover expenses and lost income if the business is unable to operate due to a disaster, government mandate or other unexpected incident.

A BOP is the Same as a Commercial Package Policy

Commercial package policies (CPP) are similar to BOPs, but there is a distinct difference between the two. A commercial package policy is designed for large businesses whereas a BOP is geared for smaller businesses. This means that CPPs generally have higher limits available and may allow business owners to add more types of coverage.

Consideration for “small business” varies per industry, but generally includes businesses with less than 100 employees.

BOPs are Expensive

BOPs are primarily created to save money on important coverages. They are generally cheaper than purchasing each important coverage individually, costing an average of $1,200 a year. This price may depend on your location, industry, size of the business, claims history, credit score and coverage limits.

A BOP is supposed to make purchasing insurance easier and more affordable. With a BOP, you can keep your insurance bills in one place at a cheaper price than purchasing individual coverages.

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