This week I’m going to talk to small business owners. Even if you are a very small business in Napa Valley, or if you run your business from home…this article is for you.
What is a BOP?
A Business Owners Policy, or a BOP as it’s usually known, is a simple way to protect you from risks that could close the doors to your business forever. It’s an insurance policy that is three policies in one- all designed to protect your business from the most common risks you face.
What does a BOP cover?
A BOP covers three major risks:
- Business Liability:
If you or your business cause harm to someone else, you could be sued. This first layer of coverage protects you in case that happens. Someone must pay the lawyers and the damages. It should be a BOP instead of you.
- Business Property:
Even if you just rent office space for your business, or you work out of your home, you most likely own some business property. Computers, furniture and tools… these all can add up to more money than you think. Your homeowners insurance usually doesn’t cover property that is used primarily for business. A BOP is designed to cover business property.
- Business Income:
This is often called Business Interruption Insurance. I like to think of this as Disability Insurance for your business. If a fire or theft stops your business from operating for a while, you still have business bills to pay. A BOP can keep the cash flow alive and save your business.
Bob and the Busted Bookcase
Here’s why you need a BOP:
Let’s say that Bob, one of your best customers, comes in to your office for a meeting. He’s done this many times before.
You hand him his usual cup of coffee. With his coffee in his right hand, he heads for his usual chair, and grabs the bookcase with his left hand to steady himself as he sits down.
Just like he always does.
But you forget to tell him that the bookcase is broken. It broke last week. You used duct tape to “kinda-sorta” hold it together until you get a new one.
Bob yells as he goes down, falling over the chair as he desperately tries to keep his coffee from spilling. It doesn’t work.
Bob suffers third degree burns from the spilled coffee, severe damage to his back, and a concussion from hitting the floor. He’s in the hospital a couple of days, and will be having back surgery in a few weeks. He is experiencing “pain and suffering” from your accidental negligence. It will be weeks before he can go back to work.
And his attorney is sending you a letter. The bills are big. The threatened lawsuit is even bigger.
If you own a business, no matter how small, you should talk with a local insurance agent who understands the unique risks you face as a business owner. Make sure you are properly covered.
Bruce Sackrison is an insurance property and casualty broker affiliated with Professional Insurance Associates helping clients with insurance needs for personal, commercial and business insurance. Bruce can be reached at 707-931-0186, firstname.lastname@example.org