BUSINESS OWNER'S POLICY

You might be surprised to learn that many small- and medium-sized businesses are in a business class the insurance carriers describe as “low risk.” If your business is in this category, you are eligible to purchase a low-cost package of policies – known as a Business Owner's Policy, or BOP -- that includes the most important types of commercial insurance:

• Commercial general liability insurance coverage (protection from claims of property damage or bodily injury)
• Property insurance (to protect physical assets)
• Under certain conditions, a BOP may also cover the lost income and expenses that a business owner incurs

Many professional services companies qualify for this valuable, low-cost protection. To find out if your business meets the criteria for a BOP, complete this short application. We’ll respond to you within 24 hours by the contact method of your choice.

How a BOP protects you and your business?

A BOP’s general liability insurance protects you from the cost of defending yourself or paying the damages if an employee, contractor, customer or other business-related third party claims that your business caused them bodily injury or harmed their property. You may also have heard this type of insurance described as commercial general liability (CGL) insurance.

For property losses, a BOP typically insures your damaged or lost property for its replacement value. This means that your reimbursement would cover your cost to replace the property, without any deduction for depreciation based on the age of the property. The property insurance included with a BOP also covers the potential that your business might be held legally responsible for damage to someone else’s property while it is in your possession. When your customer’s property is in your “care, custody or control,” it is normally covered as if it were your property.

Your general liability insurance protects the people close to your business.

A general liability policy insurance policy covers you, of course, but it also covers many of the other people involved in your business:

• If you have a joint venture or partnership, all of your partners, members and their spouses are protected if they are sued for something they do in an official capacity related to your business.
• If your business is a corporation, your policy covers all of your business’s executive officers, stockholders and directors while they are acting in their official capacities.
• If you have subsidiaries, your policy’s liability coverage extends to any subsidiary where you own at least 50 percent of the stock.
• Your employees are also protected from claims that result from actions they take in their capacity as employees.
• If you have a written agreement to indemnify a person or organization, such as a vendor, that person or organization would be protected against liability claims for property damage or bodily injury as a result of selling or distributing your products.
• During the first 90 days after you acquire a new business, it is automatically covered by this policy. After that timeframe, you would need to update your policy to continue this protection for the new part of your business.
• Anyone legally associated with your business, including volunteers working under your direction, are covered for liabilities that result from the work they do for you, and for the use or maintenance of your property that is in their care.

What costs does the general liability policy cover?

A general liability insurance policy provides financial protection from the risks that any business owner, no matter how careful, might incur. A typical policy covers the following expenses:

• The insurance company will cover the cost to defend or investigate a suit or claim against you, including court costs, witness fees, attorney's fees and police report costs.
• If the insurance company asks you to assist in your defense against a claim, it will pay your reasonable expenses, such as the income you lose because you have to spend a day in court.
• It will pay the judgments or settlements resulting from covered suits, including interest required on the judgment and the injured party’s medical expenses, if your defense is unsuccessful.
• When a court requires you to post a bond to ensure you can pay a potential judgment in a liability suit, this insurance will pay the premium for the bond.

What general liability insurance coverage protection can provide?

Bodily injury

It may be difficult to imagine how your business could cause serious harm or even death for another person. But it’s good to know that if you are ever held responsible for someone else’s sickness, injury or disease, your general liability insurance policy would pay for:

• Medical care costs
• Loss of services
• Court-awarded compensation for deaths that result from the injury

Property damage

Even if you’re careful and take precautions, it’s still possible that something your business does – or something it doesn't do – could damage another person’s property. It’s also possible that your actions might prevent the property’s owner from being able to use it. In such cases, your business liability insurance coverage compensates for:

• Physical damage to the property, or
• Loss of use of the property

It is important to note that property damage liability coverage often does not cover damages caused to the client's property you are working on or have in your possession.

Products-completed operations

Commercial general liability insurance policies generally include liability protection for services or products completed by your company. So, if something your company manufactures or a service your company provides causes an injury, your policy would pay for any resulting legal expenses, as well as damages up to your policy's limit.

Contractual liability

Additionally, your commercial liability insurance policy would cover liability you might take on when you enter into various contracts, such as:

• Easement-of-license agreements
• Building leases
• Elevator maintenance agreements
• Agreements to indemnify a municipality, if required by ordinance

Liquor liability

If you do not manufacture, distribute, sell, serve or furnish alcoholic beverages as a business, your general liability insurance policy will cover you if are held liable for a liquor-related accident. If you distribute alcoholic beverages occasionally, such as at a company picnic or office holiday party, you’d also be covered - as long as you don't charge money for the alcohol.

Employee injuries

It’s important to know that if an employee should sue you over an injury on the job, your commercial general liability insurance policy would not cover the damages. For this type of coverage, you need a workers' compensation policy.

Fire, explosion or lightning damage

Your property insurance for small businesses covers damages you may cause to other people’s property as a result of fire, lightning or explosion, whether you own your business property or rent it. This coverage even applies to other areas in your building that may be damaged as a result of negligence on your part. Let’s say a fire in your office on the building’s second floor causes damages to another company’s offices below. Your liability policy will pay for the damages to that company.

Hired auto and non-owned auto

Most businesses add an option to their general liability policy called “hired auto and non-owned auto” insurance. If you don’t have any vehicles in your company’s name, this option meets the requirements of any contract that requires you to have commercial auto coverage.

This coverage also allows you to save money on at least part of the insurance that rental car companies recommend whenever you pick up their cars. When you rent the car in your company’s name, this insurance applies to the liability part of the rental car contract. You’ll still need to purchase damage insurance from the car rental agency if you want to be fully protected.  However;  this option doesn’t cover physical damage to the rented vehicle.

Additionally, if you or an employee is driving a personally owned vehicle on company business, and you have an auto accident, non-owned auto coverage protects the company should your organization be sued. However, the policy will not cover a suit against you or your employee personally as that would be covered under a personal auto policy.

Legal defense expenses

Even if your company is not found liable for a claim, without insurance coverage, mounting a defense is expensive. A business liability insurance policy will generally pay for:

• The cost to defend or investigate a suit or claim against you, including court costs, witness fees, attorney's fees and police report costs.
• If the insurance company asks you to assist in your defense against a claim, it will pay your reasonable expenses, such as the loss of your income for a day in court.
• It will pay the judgments or settlements resulting from covered suits, including interest required on the judgment and the injured party’s medical expenses, if your defense is unsuccessful.
• When a court requires you to post a bond to ensure you can pay a potential judgment in a liability suit, this insurance will pay the premium for the bond.

Medical payments

If a person should be injured, either directly by you or at your place of business, your commercial liability insurance coverage would pay for funeral and medical expenses incurred within a year of the accident. For example, if one of your clients slips and falls at your office and requires medical treatment, your policy would cover the cost of that treatment. Of course, policy limits apply.