The expense of liability suits is one of the most severe risks facing businesses today. Operating a business without liability insurance puts business owners at great risk. Business general liability arises from six aspects of a business or its business functions. Each of the six is called an “exposure” to the risk of loss:
1. Premises Liability Exposures – Ownership, occupancy, or control of property.
2. Operations Liability Exposures – Involves some element of activity like manufacturing, processing, or contracting.
3. Products Liability Exposures – The legal liability of manufacturers and/or sellers to compensate buyers, users, and/or bystanders for injuries suffered from the use of those products.
4. Completed Operations Liability Exposures- Injuries attributed to operations that have been completed.
5. Contingent (also known as “vicarious”) Liability Exposures – Responsibility for actions of others like employees, agents, or independent contractors.
6. Contractual Liability Exposures – liability assumed under contract or agreement.
Commercial Liability coverage is very broad, requiring an understanding of the exclusions, conditions, and definitions. Separate policies, or insurance products, cover the variety of liability exposures present in most businesses.
The majority of small businesses have similar insurance needs. Most qualify for the ISO commercial package policy (CPP). Business owner policy (BOP) isa standardized, easy-to-read, package policy that combines broad protection, a limited number of optional coverage, and a simplified rating procedure along with lower minimum premiums. A business owner policy is a self-contained, complete package policy; it is a package policy designed to provide both property and general liability coverage for eligible small businesses. It is written on special BOP policy forms and rated in accordance with special business owner policy rates and rules.
The eligibility rules for the BOP are more stringent than those for the general commercial liability. Specific rules of eligibility that deal with the size of buildings, the specific type of business involved, and in some cases, the amount of gross sales, determine what risks are eligible to be covered under a Business owners policy. The ideal BOP prospect is the small to medium size, well-managed, one-location business with easily predicted coverage needs.
Please contact us for your eligibility and the insurance policy that fits your business needs best.