Business Owners Insurance for Lawyers 101: What It Is & What It Typically Covers
If you have just opened or are thinking of opening your own practice, this guide to business owners insurance for lawyers may have reached you just in time.
Together with legal malpractice insurance, a business owners policy – or BOP for short – may very well be one of the most important types of coverage you should look into getting.
The typical business owners insurance combines several types of property and liability coverage. As a result, a BOP can provide both you and your practice with broad yet relatively affordable protection and peace of mind.
What Is Business Owners Insurance?
You may have heard or read people refer to BOP as “homeowners insurance for businesses.” While this comparison is probably an oversimplification, it may not be entirely inaccurate.
Like homeowners insurance, business owners packages usually bring together general liability and property coverage under one policy. Unlike homeowners insurance, however, BOP may also include business interruption coverage.
What Does Business Owners Insurance Cover?
A BOP will typically provide general liability, commercial property, and business interruption coverage. Many insurance providers will also offer various add-ons so that you can tailor your package to your specific needs.
Standard general liability coverage can typically protect you from financial harm due to:
- Bodily injury and property damage. This includes situations where third parties suffer bodily harm or property damage on your premises or as a result of your business operations and then sue you for the ensuing losses such as medical bills, lost wages, or repair costs. Examples include slip-and-fall accidents or a client who trips over your carpet and breaks their laptop.
- Product liability. This offers coverage for claims that occur when a third party suffers injuries from a product you gave them.
- Advertising and personal injury. This includes claims for libel, slander, copyright infringement, invasion of privacy, and false arrest.
- Hired/non-owned auto liability. This coverage can protect you from claims where an employee uses their personal vehicle for business purposes and injures someone in an accident.
Commercial property insurance normally covers the premises where you conduct your business operations, whether you own or rent the space. It also may protect leased or owned items such as furniture, office equipment, and filing systems.
The business interruption
component of a BOP package may provide you with two distinct types of protection: business income and extra expenses coverage.
- Business income. This coverage can compensate you for the lost earnings you incur as a result of being unable to return to your office due to a covered event. For instance, this may include situations where a fire or hurricane causes you to suspend operations temporarily. You may use the proceeds to cover your rent or mortgage payments, utility bills, employee wages, and other unavoidable business expenses.
- Extra expenses. Where available, this coverage can enable you to lease temporary equipment and office space. This way, you may be able to carry on practicing even while your primary office is undergoing repair work or is otherwise unavailable due to a covered event.
BOP Coverage Extensions
As BOP is a package policy, some insurance providers may also offer various additional coverage extensions for you to choose from. Examples include:
- Building glass
- Outdoor signs
- Inland marine
- Outdoor property
- Fine arts coverage
- Accounts receivable
- Earthquake protection
- Property off-premises
- Computer equipment
- Equipment breakdown
- Employee dishonesty
- Forgery and fidelity bond
- Valuable papers and records
- Employment practices liability
If you are unsure which extensions to purchase – or whether you need any at all – it may be a good idea to talk to an insurance provider. They can help you assess your needs and help you design a BOP package that suits the unique requirements of your practice.
What Does Business Owners Insurance Not Cover?
Most BOPs do not cover:
- Intentional acts. The typical BOP does not cover criminal acts, fraud, and intentional or expected bodily injury and property damage.
- Wear and tear and maintenance work. A BOP primarily covers sudden, unexpected, and accidental damages.
- Floods. For this exposure, consider buying flood insurance. However, BOP may cover other types of accidental water damage, such as broken pipes or a leaking roof.
- Liquor liability. A BOP is unlikely to cover bodily injury or property damage related to the sale, distribution, or serving of alcoholic beverages.
- Nuclear hazards, earthquakes, and insect infestations. However, some providers may offer earthquake coverage as an add-on.
Do You Need a Business Owners Policy?
You can likely benefit from a BOP if you:
- Run your own firm, however small or large
- Own or rent a physical workspace, even if that is your home
- Have contracts that require general liability coverage
- Have business assets that may be damaged or stolen
- Are looking for a cost-effective policy that combines multiple coverage types
What Are the Benefits of Business Owners Insurance?
A BOP may protect you against lawsuits and loss of income due to a wide array of covered events, including accidents, property damage, and more. Without a BOP, you could be responsible for covering the associated legal fees yourself and paying out of pocket for certain types of property damage. You may also lose income due to episodes of business interruption.
Also, if you were to purchase general liability, commercial property, and business income coverages separately, it would likely cost a lot more. By combining them in one package, you can get a wide range of protection at a comparatively lower rate.
Business Owners Insurance for Lawyers: The Bottom Line
BOP packages typically include a wide array of coverage types, and different insurance providers may offer different policy extensions for you to choose from. With so many options on the market, it could be hard to find a suitable policy for your needs.
To obtain a free quote or speak with someone about a BOP, click here.
This information is provided for general informational purposes only and is not intended to provide individualized advice. All descriptions, summaries, or highlights of coverage are for general informational purposes only and do not amend, alter, or modify the actual terms or conditions of any insurance policy. Coverage is governed only by the terms and conditions of the relevant policy.