What Kind of Liability is Covered Under a Business Owners Policy?

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A business owners policy (BOP) is a type of insurance policy created to protect small businesses with important insurance at a more affordable price. By bundling your business’ insurance coverage's in a single BOP, you can save money as compared to purchasing every coverage separately.

Each BOP is different, as these policies are adjustable depending on the needs of your business. At its very basic, a BOP includes:

General Liability insurance covers claims regarding bodily injury, property damage and personal and advertising injury that are filed against the business. For example, if someone is injured in your retail store, general liability insurance can help pay for their medical expenses as well as cover the business for legal fees in case the victim decides to sue.

Commercial Property insurance covers the physical property owned by the business in case of loss or damage due to fire, wind, lightning, hail, smoke, explosion, theft, vandalism and more. This can apply to the physical structure such as a restaurant, equipment, furniture, decorations, etc.

Most BOPs also come with business interruption insurance, which compensates the business for income lost while the business is unable to operate due to a disaster or government mandate.

This is the most basic form of a BOP. Many business owners choose to add coverages to their policy in order to cover against different accidents. Lawsuits, for example, are extremely dangerous for a business. A single liability claim can send a business thousands of dollars in debt. New businesses especially don’t usually have the cushion to cover expensive, uninsured lawsuits.

Liability coverages you may add to your business’ BOP include:

Professional Liability insurance covers accidents regarding professional negligence. If a person offering specialized or professional services causes their client to lose money due to a mistake, professional liability insurance can help compensate the business.

Cyber Liability insurance covers expenses related to a cyberattack, such as PR and data recovery.
Directors and Officers insurance covers the key directors and officers of a business in case they are sued directly regarding their actions while employed. This can include stock performance claims, overreaching, and human resource issues such as discrimination and sexual harassment. The latter coverage is generally known was employment practices liability and can be bought separately or as part of a directors and officers policy.
Product Liability covers bodily injury and property damage caused by the business’ offered or produced products.

What Kind of Liability is Covered Under a Business Owners Policy?

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