While insurance companies often sell business coverages separately, most offer small to medium-sized companies business insurance policies that combine protection from all major property and liability risks in one package called a Business Owners Policy, or BOP for short. Larger companies will often purchase a commercial package policy or they may decide to customize their policies to meet the special risks they may face.
Rating systems and coverage options
MGAs, Program Admins, and many insurance carriers will often use an automated rating module to offer these packages at the best rates to their insureds. The standard BOP covers the three essential areas of concern, which includes liability protection, which covers a company’s legal responsibility for any harm that it may cause to others.
For example, anything that an owner, or anyone that he or she employs, does or fails to do during regular business operations that may cause bodily injury or property damage due to defective products, faulty installations and any errors in services provided can be grounds for a claim.
Business interruption insurance is vital for any company that suddenly, and unexpectedly must close due to anything from a power outage to weather conditions that causes damage or destroys their property, or anything else that forces the business to cease to properly function. This area of coverage covers the loss of income and can also include the extra expense of operating out of a temporary location.
Property insurance covers the buildings, along with the contents (equipment, furniture and the like) owned by the company. There are two different forms available; standard, and special, which will provide more comprehensive coverage for companies with specific needs beyond the standard coverage.
It’s important to note that a BOP, for all of the coverage that it does provide, doesn’t cover everything. Certain claims, including those arising from professional services performed are not covered, nor are client damages due to inaccurate or incomplete advice given to a client that results in financial loss or reputational damage.
If a BOP is a good fit for the type of business that a particular company is engaged in, the rating module is the best way to determine rates quickly and efficiently.