Business Owner’s Policy: A Good Starting Point

In the past, we have discussed that a Business Owner’s Policy or BOP’s may be a good option for your new or small business.  BOP’s can cover many of the risks associated with a business while keeping the premium you pay in balance with a small business or start up.

A business owner’s policy is generally quite inclusive.  It is important for you as a business owner to review the specific coverage in detail with your commercial broker.  More important however, is a review of the exclusions.  You need to know what is not covered as well as what is.  Exclusions are damages not covered by your policy. Here are some of the common exclusions to BOP’s you want to be aware of as you consider a BOP.

Boiler and Machinery insurance, also know as equipment breakdown or mechanical failure is often not included in a business owner’s policy.  Review with your commercial insurance broker if this is a coverage your business would need.

Commercial Fleet (vehicle) insurance is generally not covered in a business owner’s policy.  Since vehicles are an expensive asset, it is important to maintain coverage on them.  A loss of a truck, a delivery van, or other vehicle(s) critical to your business could have a serious impact on your business and its cash flow.  Commercial vehicle insurance should be discussed with your broker if your company owns vehicles or equipment, or if driving may be a component of your business.

Debris Removal insurance is also coverage generally excluded by a business owner’s policy.  Businesses located in areas where tornadoes, hurricanes, and flooding exist may want to consider this type of coverage.  Property insurance will generally cover rebuilding, but not the clean up and debris removal necessary to get the rebuilding process started.

Every business owner’s policy is specific to you.  Just make sure you understand both the protection offered, and risk still exposed.  Work with your broker to customize the best coverage for your premium dollar.

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