What Is A Business Owners Policy?

 Peril: Cause of loss.
 Risk: Uncertainty arising from the possible occurrence of given events that would
result in loss with no opportunity for gain.
 Hazard: Condition that increases the probability of loss.
Example: There was a cumulative loss of Rs 500 000.00 in a building because of fire caused
by a faulty electronic switch. Between fire and a faulty electronic switch, which one is a
hazard?
According to the Insurance Lexicon, Fire was the peril and the switch was the hazard. And
Risk is the chance of that peril causing damage due to the hazard.
Auto Liability: It doesn't cover any damage to your (insured) vehicle or property, or any
bodily injuries you suffer. It's strictly for damage and injuries to others and their property.
Self: Most drivers also purchase additional auto insurance coverage such as comp/collision,
which does cover damage to your own vehicle, and personal injury protection, or PIP, which
covers your own injuries, lost wages and other associated costs.
What is a Business owners Policy?

Designed specifically for small businesses, a Business Owners Policy (BOP) is a combination
commercial policy that covers property damage, general liability and business interruption.
It is written with strict underwriting guidelines including maximum allowable square footage
for office, retail, or apartment risks. A BOP is most appropriate for small, “main street”
businesses such as: hardware stores, barbershops, greeting card shops, accountant offices,
or low-density apartment houses
The property insurance portion of a BOP is usually available as named-peril coverage, which
provides coverage only for damage caused by events specifically listed in the policy
(typically fire, explosion, wind damage, vandalism, smoke damage, etc.)
BOP will also cover any business-owned items or items owned by a third party but kept
temporarily in the care, custody or control of the business or business owner. Business
property must usually be stored or kept in qualifying proximity of business premises (such
as within 100 feet of the premises).
What is a commercial package Policy (CPP)?
Commercial risk insurance provides more than one type of coverage, such as commercial
property, commercial crime, commercial and general liability.
My Business operation involves the Manufacturing of a tangible Product. does a general
liability Policy Protect Me?
The general liability (Premises/Operations) policy would respond to bodily injury and
property damage claims that occurred as a result of an accident on the premises or work
site - i.e., a slip and fall type claim. Injury as a result of a product manufactured by the
business is not covered by the general liability or BOP. Manufacturing type businesses need
to carry Products/Completed Operations liability coverage which is specifically designed to
respond to claims by people who are injured as a result of the product they bought from or
through you.
What is the difference Between general liability and Professional liability?
A general liability policy covers bodily injury and property damage claims that result from
your negligence on your premises or as a result of your operations including actions of your
employees.
A Commercial General Liability (CGL) policy protects your business from financial loss
should you be liable for property damage or personal and advertising injury caused by your
services, business operations or your employees. It covers non-professional negligent acts.
A professional liability policy covers physical and financial injury that may occur to
someone as a result of a service provided or a failure to provide in a professional capacity
(errors and omissions).
Workers compensation and employment practices liability insurance are excluded but can
be purchased as separate policies.
Coverage A: Bodily Injury and Property Damage Liability
Coverage B: Personal and Advertising Injury
Personal and advertising injury liability protects an insured against liability arising out of
certain offenses.
Coverage C: Medical Payments
Limited coverage for medical payments includes payments for injuries sustained by a non-
employee caused by an accident that takes place on the insured’s premises or when
exposed to the insured’s business operations. Coverage is provided on a no-fault basis.
Umbrella Policy
An umbrella is a type of liability policy. It applies over and above the coverage afforded by
your primary general liability policy. If you have purchased commercial auto liability and/or
employers liability coverage, your umbrella should include those coverages as well.
 Over the primary liability insurance carried by the insured in the event that the
primary insurance is exhausted by a loss;
 Of liability exposures for which there is no primary insurance; or
 When the primary policy contains an exclusion that is not similarly excluded under
the umbrella policy.
Co-insurance in Property Insurance
The Coinsurance clause will require the insured property to be insured for a certain
percentage of its total Actual Cash Value/Replacement Cost value. Typically, the
Coinsurance percentage will be set at 80% (80% is most common, but the percentage can be
changed in most cases). Hence if the Coinsurance percentage is 80%, a piece of property
has to be insured for 80% or more of its total value at the time of a loss, or there will be a
'penalty' applied to the claim settlement.
Uninsured and Underinsured Motorists
An uninsured motorist is one who has no insurance, does not have insurance that meets
the state-required minimum liability coverage or whose insurance company is insolvent,
unwilling or unable to pay for the claim. A hit-and-run driver would also be considered an
uninsured motorist because you don’t have the individual’s or insurance company’s
information in order to make a claim. Uninsured motorist (UM) provides bodily injury
liability coverage to policyholder and/or your passengers that are injured.
An underinsured motorist (UIM) is one who doesn’t have enough liability insurance to
cover you or your passenger’s injuries but are still above the state-required minimum.
Increased Limit factors
Multiplicative factors that are applied to rates or premiums for "basic" limits of coverage to
determine premiums for higher limits of coverage.
First, the larger volume of data on claims of relatively smaller sizes is used to calculate basic
limit loss costs in full class, state and territory detail. (For example, for General Liability and
Commercial Automobile Liability, Insurances Services Office (ISO) uses a basic limit of
$100,000.) Then, increased limits factors --- which represent the ratio of expected costs at
higher limits of liability to expected costs at the basic limit --- are calculated using a
broader combination of experience, such as class group, state group or countrywide
experience. These increased limits factors are applied to the class, state and territory
specific basic limit loss costs to produce higher limit loss costs that reflect individual class,
state and territory differences.
North Carolina Surcharge
14.61% surcharge on their liability insurance policies to plug a $96 million shortfall in the
state’s insurance risk pool.
Occurrence basis coverage – only matters that the policy was active when the alleged
incident (PD, BI) occurred. It is designed to protect you against long-tail events – incidents
that could cause injury or damage years after they occur. For example, a chemical spill is a
long-tail event because it often takes decades to produce visible injuries or disease.
Claims-made coverage - Claims made (reported) against an insured during the policy period.
The alleged incident that leads to the claim may take place before or during the policy
period. Ex: Employment practices liability and may also cover the actions of directors and
officers of the business.
Retroactive date - The date on or after and before the end of policy period which alleged
incident must occur. i.e. no live policy = no coverage
Typically, your policy’s retroactive date is the date on which your professional liability
contract is written and will not change as long as you continually renew your policy.
Each person limit – Max. Amount that insurer will pay for Bodily Injury to any one person
for a covered loss.
Aggregate limit – Max. Amount that insurer will pay for all covered losses during the
covered policy period.
Each occurrence limit- Max. Amount that insurer will pay for a single incident during the
covered policy period.
Split limit ( Bodily Injury ,Property damage): 50/100/25 Indicates as follows.
50,000 limit for BI per person per accident
100,000 limit for total BI per accident
25,000 limit for PD per accident

What Is A Business Owners Policy?

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 Peril: Cause of loss.

What is a Business owners Policy?

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