TUESDAY, JANUARY 2, 2024
When you enroll in a business owners policy (BOP) as part of your commercial insurance benefits, you will receive several critical types of coverage in one package. There are numerous benefits available in this package, including liability coverage that is designed to protect you in case of negligent accidents that might lead you to face legal challenges.
Luckily, your BOP’s liability insurance will provide the necessary legal assistance to help you following allegations that your mistakes harmed someone else. This can be very helpful to you, but you must make sure your policy offers you customized benefits.
The Basics of BOP Coverage
BOPs generally offer three benefits:
- General Liability Insurance: General liability covers basic claims against the business concerning bodily injury, property damage and personal or advertising injury. This insurance can cover medical bills for someone injured on your business’ property as well as lawsuits filed against the business.
- Commercial Property Insurance: Commercial property insurance covers the physical location of the business and its contents in case of damage caused by fire, wind, hail, lightning, smoke, theft, vandalism and more.
- Business Interruption Insurance: Following a damaging event in your business, you might have to temporarily halt operations. This coverage can assist you with recouping lost income and operating expenses that continue to beckon during these times.
How Does BOP Legal Assistance Work?
General liability insurance pertains to situations where your mistakes (however accidental) harm someone else. Therefore, it’s only natural to expect someone to take legal action against you if they were to experience harm in your business.
When a lawsuit does beckon, however, your BOP can help you through the situation. When you contact your insurer about legal assistance, they will work with you to analyze the losses that both the third-party losses and the court actions are likely to cost you. They will then work with you to both settle with the affected party and cover your own costs, such as attorneys fees. Keep in mind, this compensation may be paid as the expenses occur and will only be provided once the claim is approved.
What Lawsuits Do BOPs Cover Me Against?
Generally, basic BOPs only cover legal expenses related to general liability claims. These include:
- Bodily injuries
- Property damage
- Personal injuries
- Product injuries
- Completed operations liabilities.
However, it is possible to expand your basic liability coverage with much more specific benefits. These include:
Professional Liability Insurance
Professional liability insurance covers claims concerning professional negligence. For example, if you offer a specialized service, consulting or professional advice, this insurance will cover you in case you make mistakes that cause clients to lose money. Those who often need these policies include:
- Contractors
- Medical professionals
- Advisers
- Technicians
- Architects
- CPAs
- Lawyers
Directors and Officers Insurance
A business’s key employees (C-level executives, board members, etc.) assume a huge degree of responsibility for the business’s conduct. Therefore, they often stand to take the blame when problems arise. Claims filed against your business’s directors have a potential to threaten not only the business’s assets, but also the personal assets of the involved parties. This coverage will make sure that the affected individual doesn’t suffer undue burdens as a result of these issues.
Employment Practices Liability Insurance (EPLI Insurance)
This coverage is similar to D&O insurance, though it has its key differences. This covers lawsuits filed against the business concerning the business’ (or certain individuals in power) employment practices. Possible lawsuits include discrimination, sexual harassment, wrongful hiring or firing, failure to promote and more.
Cyber Liability Insurance
Any business that stores data could face data loss or theft. If this loss impacts customers, then they face risks of financial loss, identity theft and significant privacy breaches. Cyber liability insurance can cover expenses related to a recovering information, PR costs to recover from fallout after a breach, and compensation for cyberattacks in which information is held hostage for money.
Liquor Liability Insurance
Liquor liability insurance is geared specifically for businesses that serve or manufacture alcohol. While most liability insurance policies cover claims concerning the business’ direct actions, liquor liability insurance covers indirect actions.
For example, if a patron drinks and leaves your business location and ends up injuring someone, liquor liability insurance can cover your business in case expenses for the damages and injury falls back on your business. A business may be blamed for overserving, which can turn into an expensive lawsuit.
Umbrella Liability Insurance
Think of umbrella liability insurance as extra coverage on top of that offered by your other liability benefits. It is essentially a blanket policy that fills in the gaps left by any of your other liability insurance policies. This includes the above liability coverages as well as liability that may be on your commercial auto insurance policy. If one of your liability insurance policies reaches its limit for a claim, this insurance will step in to cover the remaining expenses.
All in all, your BOP can provide substantial liability insurance against general claims, along with requisite legal assistance. However, you should use this coverage in conjunction with other, specialty liability policies in order to fully optimize your coverage.
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