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What Does a Business Owner’s Policy Cover?

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What Does a Business Owner’s Policy Cover?

Since a business owner’s policy bundles three different types of coverage, it will generally cover claims falling under those coverage types.

The first type is general liability (GL). GL is a popular type of commercial coverage that’s essential in the event of third-party injuries and damages.

It typically covers:

  1. Third-party bodily injury
  2. Third-party property damage
  3. Personal and advertising injury
  4. Claims resulting from defective goods

The second type is commercial property insurance. This type of coverage is particularly helpful for small businesses with valuable physical assets, such as a building or specialty equipment and tools. It typically covers damage caused by these events:

  • Fire
  • Wind, storms, and snow
  • Vehicular damage to the business’s property
  • Sprinkler leakage and various other forms of water damage
  • Vandalism
  • Building collapse

Please note: Commercial property insurance does not cover damage caused by earthquake or flood, cyber fraud, or damage to vehicles.

The third type is business interruption insurance. If a small business is forced to close up shop due to arson, theft, or a natural disaster, business interruption insurance typically covers:

  • Temporary relocation
  • Payroll
  • Fixed costs such as operational expenses
  • Loan payments and taxes
  • Closure due to damage to a nearby business
  • Training costs on new replacement equipment

This coverage doesn’t extend to earthquakes, floods, or public health events. It also won’t reimburse you for utilities, undocumented income, or broken items.

If you want to customize your business owner’s policy, the following add-ons may be available:

  • Cyber
  • Employee theft
  • Spoiled merchandise
  • Forgery
  • Equipment breakdown

Want to know more about BOP insurance?

Business Insurance
What Does a Business Owner’s Policy Cover?


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*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.

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