When a company begins to grow and generate profit, owners want to protect their assets more than ever before. They may look to your personal lines agency to upgrade their business coverages, but are you qualified to take a commercial policy and general lines policy and bring them together as one? What do insurance laws say about personal insurance agents and selling a Business Owner's Policy (BOP)?
What Is a Business Owners Policy (BOP)?
When working with insurance, you deal with various terms and coverages. In business, customers may exclude coverages that they believe are unnecessary to save money. But as a business expands, certain insurance coverages could become increasingly vital. A personal lines agent might conduct an evaluation with a client that may reveal that what was once redundant is now becoming more attractive to your customers.
How can you help your client's expanding business, in any case? How may their existing policies be improved? First, let's take a brief look at what they currently own.
Commercial Property Insurance
Commercial property insurance covers the building and its contents. The policy typically includes equipment and inventory losses or damage due to fire, vandalism, and some natural disasters.
General Liability
General liability covers damages to another person or business due to negligence on the part of a business. This can be through bodily injury, property damage, defamation, copyright infringement, or defective products.
With a BOP, the combined policy adds an extra layer:
Business Interruption
This coverage protects a company if it must remain closed for a more extended period. Retail stores, eateries, and manufacturing, are just a few examples of businesses that depend on their physical structure to store goods or carry out everyday operations.
It might help the company temporarily relocate if a fire or other event forces it to close its doors. Depending on the carrier, coverage begins 0 to 72 hours after the incident occurs.
Some covered perils are:
- Wind and Hail Damage
- Fire Damage
- Water and Freezing Damage – Not flood; this would be only covered with a stand-alone flood policy
- Burglary, Theft, and Vandalism
Optional coverages:
- Cyber Coverage – Coverage should a business experience a data breach
- Errors and Omissions – Legal fees should a client claim they had a loss due to your company’s negligence
- Spoilage and Temp Change – The cost of replacing damaged or spoiled merchandise after a power outage or mechanical malfunction.
- Accounts Receivable – Covers financial losses should your records be damaged in a covered peril
- Earthquake Insurance – An add-on that covers earthquakes, landslides, and mudflow
- Employee Dishonesty – Covers for losses due to employee illegal activity and theft
Can A Personal Lines Agency Sell A Bop?
Recall that the addition of business interruption will result in the creation of a BOP. It cannot be offered as an independent policy. So, a personal lines agency and its agents are not required to obtain special licensing to provide their clients with BOPs.
Although, it would be advisable to have training on selling the product as the coverages require knowledge of how the business interruption portion is handled. They should understand the benefits of selling the bundled package alongside Commercial Property and General Liability.
Among the benefits are:
- Your clients will have all their policies in one place.
- Bundles are often sold at a discounted rate.
- They will have the peace of mind of the added coverage.
Launch BOP Sales
When a business is growing, and requires coverage to protect them against a forced extended closure, then a Business Owners Policy (BOP) is the solution. Your personal lines agency can assist them in achieving the desired goal.
Contact our experts at Relay to learn more about how they can assist your business clients in obtaining the product they are searching for, like a BOP, and grow your business today.
