Answer: A BOP.
That would not be BOP deluxe, for you fans of 70s progressive rock. Just BOP.
BOP stands for business owner’s policy, which is way less cool than progressive rock, unless you’re into saving hundreds or even thousands of dollars on commercial insurance. In that case, it’s still less cool than progressive rock.
BOPs are the El Caminos of small business insurance (another 70s thing, yes, but if you don’t know what an El Camino is … well, I feel sorry for you, man). It’s not a car. It’s not a pickup truck. It’s a little of both.
Insurance people refer to the “gestalt of El Camino” to explain BOPs. No they don’t. I’m probably the first. The point is that BOPs come from the insurance factory with a little bit of this and a little bit of that for businesses that don’t need a lot of either.
Sometimes, commercial insurance comes in packages. Insurance people refer to these as “package policies.” Seriously. They do. You can buy package policies a la cart to insure buildings, inventory, business liability, crime, commercial autos, etc.
A commercial package policy lets you include forms of insurance that you need and exclude forms you don’t need. Package policies are the antithesis of El Camino because you can make them more car than truck to avoid wasting money on unnecessary forms of insurance.
For example, if your business is selling used mattresses out of a leased storage unit, then I definitely won’t be buying my next bed from you.
That’s a story for another day. But let’s say that is what you do and you want to insure your business liability, commercial auto and your inventory of used mattresses. You don’t need insurance for crime or valuable papers or business interruption. So, you could buy a package policy to insure only what you need to cover.
BOPs are similar in that they come packaged with different forms of insurance. The main difference is that they come packaged with certain kinds of coverage whether you want them or not. And the limits for all forms of coverage within a BOP are capped at relatively low numbers.
Now, you might ask, “Why the hell would I buy a business insurance policy that includes coverage I don’t need?” Because I get paid more commission, stupid.
No, just kidding. The real answer is because you probably will pay much less for a BOP that comes packaged with coverage you don’t need than you would pay for a package policy that has only what you do need. Why? Trust me. You don’t want to read that here but it’s a true fact.
And, by the way, I get paid a lot less commission on a BOP than I do for a more expensive package policy. That’s just how much I care. I really do.
How do you know whether a BOP is right for your business? The answer boils down to how much insurance do you need? If your business needs just a little bit of one kind of insurance and a little bit of another, a BOP might be right.
Just like an El Camino. Sometimes you need a car. Other times you need a truck. But you never need either one enough to spend the money for both. And so we have the gestalt of El Camino as it pertains to small business insurance.
