When a business experiences a loss, you readily think of the damage to the building and its contents. It can be an unpleasant experience to learn about the economic impact when you realize some of the greater consequences of that loss.
As a business owner, you do not want your covered loss to create other non-covered expenses. To that end, many insurance companies create a package of coverages designed specifically for business owners. Such policy is often referred to as a Business Owners Policy, or a BOP. Many of the coverages included in a BOP may be ones that you never considered for your business. Without such coverages, you could have a number of out-of-pocket expenses in the event of a loss. By way of example, we explain below some of the coverages in Mutual Benefit Group’s BOP policy:
- Business Income During a Period of Restoration – Time is money, and if your business is closed due to a covered loss, you are probably also losing income. This coverage pays for your actual net income lost, for up to 12 consecutive months after the loss or damage.
- Extra Expense Incurred During a Period of Restoration – To prevent losing customers, you may choose to remain in business while your property is being restored. This could mean renting additional space, advertising, etc. With this coverage, Mutual Benefit doesn’t just repair or replace the damaged property; we help pay for these additional expenses so you can continue to service your customers.
- Fire Department Service Charge – More and more fire companies are charging for their services, and it is not uncommon for more than one fire department to assist with a fire. With this coverage, Mutual Benefit provides an additional $25,000 to cover those costs.
- Identity Fraud Expense Coverage – Individual business owners face risks daily for having their identity stolen. Mutual Benefit provides $10,000 to assist with the expenses incurred to restore your identity, including up to $5,000 for additional advertising.
- Pollutant Clean-up and Removal – Mutual Benefit will pay $10,000 to remove pollutants, i.e., spills from your described premises.
- Ordinance or Law Coverage – Building codes are constantly changing, requiring buildings with a certain degree of damage to be rebuilt according to today’s building codes. If your building was grandfathered (meaning your building is out of compliance, but due to its age, you were exempt from bringing the building up to code), after a significant loss, you may no longer be grandfathered. You may need to rebuild the building with an elevator or a sprinkler system. Mutual Benefit’s Ordinance or Law Coverage provides $50,000 to assist with those expenses. Higher limits are available.
If your business is a wholesale operation, you also receive:
- Branded or Labeled Merchandise – If you have branded or labeled merchandise that sustains a covered loss but which can still be sold as a salvaged item, we will pay your expenses (up to your business personal property limit) to stamp the merchandise as “salvaged” and/or pay the costs to cut out the labels (unless it will further damage the product) to comply with state laws.
- Definition of “Who is an Insured” – This includes limited coverage for vendors. Many wholesalers rely on vendors to sell their products. It may make it easier for you to obtain and retain vendors by this extension of coverage to them.
- Consequential Damage – When part of a product is damaged by a direct cause of loss, it can cause the entire product to be unmarketable as a whole. As a result, you either sell it at a reduced rate or you are not able to sell it at all. With this coverage, Mutual Benefit provides up to $25,000 for the undamaged part of the product.