Fundamentals of the BOP
The BOP simplifies insurance by combining coverages typically found in separate property, liability, crime, and inland marine policies. It meets the needs of most small to medium-sized businesses, with additional policies available for uncovered exposures.
Purpose
Provides comprehensive coverage for eligible businesses based on size and type.
Size Eligibility
Business locations must not exceed:
- 35,000 square feet (excluding basements not open to the public).
- $6 million in annual gross sales.
Eligible Business Types
- Apartment buildings (including residential condo associations)
- Contractors (payroll ≤ $300,000, no work above three stories)
- Mercantile risks (merchants)
- Processors and servicers
- Wholesalers
- Office buildings (≤ 6 stories or ≤ 100,000 square feet)
- Motels (≤ 3 stories, no square foot limit)
- Restaurants, including fast-food and those with limited cooking
- Self-storage facilities (except those storing motorized vehicles outdoors)
- Convenience/grocery stores and supermarkets (including those selling gasoline)
Note: Business personal property in eligible buildings must be insured under the same policy as the building.
Ineligible Business Types
- Manufacturers
- Auto repair/service stations, auto/motor home/mobile home/motorcycle dealers, parking lots/garages
- Bars and pubs
- Places of amusement
- Banks and financial institutions
- Self-storage facilities storing motorized vehicles outdoors
Characteristics
The ISO Businessowners Policy consists of three sections:
- Section I—Property: Covers property-related risks.
- Section II—Liability: Covers general liability risks.
- Section III—Common Policy Conditions: Includes terms like cancellation, changes, fraud, audits, inspections, other insurance, liberalization, premiums, recovery rights, and policy assignment. These apply to both property and liability sections.
Terms are defined at the end of each respective section.