A Business Owners Policy (BOP) consolidates all the necessary lines of insurance together for small business owners. Chuck Hembree joins the program to discuss the advantages of this particular policy.
Below is a transcript of the episode, modified for your reading pleasure. For more information on the topics discussed in the episode, see the links at the bottom of this post.
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Grant FINLEY: Welcome to Your Insurance Connection Podcast. I'm your host, Grant Finley, joined once again by President of CLH Insurance, Chuck Hembree. Chuck, nice to see you again. How are you?
Chuck HEMBREE: Just fine.
FINLEY: So, today on the docket we wanted to talk about B-O-P, BOP - Business Owners Policy and without further ado, let's just jump right in. Can you just tell me what a B-O-P is?
HEMBREE: Sure. Insurance is just full of acronyms. They always have to put letters to it. A BOP stands for Business Owners Policy just like if you want to have a good agent make sure they're a CIC or have their CISR and make sure they have good E&O. We use acronyms all the time but business owners policy is what BOP stands for and it's a great little policy to be aware of.
FINLEY: How is this coverage unique and different from other commercial policies?
HEMBREE: Years ago, maybe some of our listeners would remember that you didn't have a homeowners policy like we have today. You had a general liability policy and then you had a fire policy. There were two policies to cover your home. Well, some smart fella came along and figured out that we should package these together and we can write a homeowners policy on one form that covers the home, its contents, our personal liability for insureds and medical payments and they packaged those all into one product. Well that's in essence what happened with the business owners policy. We still do write today a separate property policy, a separate inland marine, a general liability policy and all the little specific parts that we need to tailor make for either a simple or a complex commercial account. Still a very viable product today. But, for select commercial products, we put them together like we did with the homeowners so that they're all in one product and it includes your contents and your building and your liability and we can put employment practices liability in it and business income. Almost everything that a small business owner would need.
FINLEY: It may go without saying but I'm going to ask anyway, what are the advantages or the inherent disadvantages to this type of coverage over a similar type of coverage.
HEMBREE: Well, the good thing is it's really well thought through and for those of us who are small business owners, it's all in one place so we don't have to re-negotiate and look at three or four or five different pieces of the puzzle. It's great because it includes, probably, the limits that we need for a small business. So, even though it has employment practices liability it may not be as broad for what we would need for the Boeing company, but it suits the needs for the small business owner. It's great in the fact that you don't have to know tons about insurance and yet if you have a business owner, most all of your exposures are going to be covered. Not all of them, but the biggest part of them and the inherent disadvantage is that it's kind of slot regulated. You have to fit in the box of what's acceptable before you can have this type of coverage. We can't write it on a large manufacturer. It just doesn't fit that and they're still going to have to have the traditional package with the separate property, the separate liability that's tailored to their classifications and their exposures.
FINLEY: You mentioned you have to fit inside a certain box, so what are those parameters then? Can you tease out those parameters a little bit?
HEMBREE: Sure, it gives limitations or boundaries to what qualifies for this type of program and there are certain boundaries as: how high can your sales be, how large can your receipts be, how much square footage can you occupy, and what type of client are you? Are you going to require professional liability? You can get professional liability under the business owners, but it's for smaller type risks or exposures that you're going to have less risk in. For instance, we can get professional for a hair dresser. It's a little bit lower class of professional liability and so it does fit, where we could not get errors and omissions or professional liability for an architect underneath this product. So, if you fit the mold, it's a great product for you.
FINLEY: How often would you say CLH writes these policies, specifically?
HEMBREE: Oh my gosh, maybe 60-70% of the time. A large percent of the time because it's a pretty big one and that may be inherent with who we are. We write the small and medium size business, we're not always going after the large, large, large client so a lot of our clients are going to fit in here. Some don't, but a lot do.
FINLEY: Alright, so if I'm a small business owner and I think that I fit into these parameters, into this box we've talked about, what would the next steps be for me secure this type of coverage?
HEMBREE: That's a great question and that's where you need to involve your agent or your broker. You're not sure whether you qualify or not so call them up, give them a good understanding of what you do in your business and so forth and see if you qualify for this type of package, this business owners policy. And, eligibility sometimes can differ company to company. So, with an independent agent like us, who represents several, we're going to have several types of business owners from several companies and we may have broader ability to place a small business owner's risk. And then also, if you're not eligible, then they'll be able to tell you, "well, here's what you can do." So, I think the first step is go and talk to your agent or broker about your eligibility. Second of all, if you don't have an agent or broker, you don't feel comfortable doing that, you can do a little bit of investigation on the internet and it'll help you to understand the business owners as well. Between those two things, I think you'll be able to really find a good package and how to protect your business.
FINLEY: Great, Chuck, a wealth of knowledge as usual, thank you very much for the insight. Unless you have any closing thoughts, I think that will wrap it up for today's episode.
HEMBREE: Nope, it's not exactly bee-bop, it's just BOP and I hope it's a product that a lot of our folks can qualify for, and we'd love to hear from them if they'd like to find out more.
FINLEY: Absolutely, if you need a quote, hop online - clhins.com or give us a call - 636.391.0700. Until next time, thanks for listening.
Your Insurance Connection podcast can be heard on iTunes and Stitcher or by visiting clhins.com/content/podcast. If you like what you’ve heard you can support this podcast by rating and/or sharing it on your social platforms. CLH Insurance is a “Trusted Choice”, independent agency servicing Missouri, Kansas and Illinois. For more information on CLH Insurance, visit clhins.com or call 636.391.0700 to speak with an agent. Until we connect again, thanks for listening.
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Show Notes - Where you can learn more about the people and ideas discussed in this episode.
CIC - Certified Insurance Counselor
CISR - Certified Insurance Service Representative
E&O - Errors and Omissions
Employment Practices Liability