FRIDAY, MAY 21, 2021
Why an All-Risk BOP Is Worth the Investment
Small businesses often find their primary insurance solution within a business owners policy (BOP), which contains several essential benefits in one place. One of these elements is property insurance, which is designed to insure you if physical hazards ever damage your company assets.
While property insurance plans offer numerous benefits, they won’t cover every instance of property loss. Still, if you invest in an all-risk plan, also known as an open-peril plan, you will have a much more expansive level of protection available.
What is All-Risk Coverage?
Your BOP’s property insurance will agree to cover you against unexpected, unavoidable damage to owned property (stock, equipment, furnishings, etc.) within your business. Common causes of property damage include fires, severe weather, vandalism or theft. Most property benefits will insure you against these perils.
However, when you take out an all-risk BOP, you will have coverage for an expansive list of perils. The policy is written in a way so that it covers every type of property damage that is not specifically excluded by the wording within the BOP. Therefore, unless your policy explicitly says it won’t cover a certain loss, you will be able to file a claim.
This benefit provides a significant expansion of coverage compared to its opposite, named peril coverage. Under a peril plan, your policy only covers specific hazards, with every other potential loss excluded. Therefore, an all-risk plan proves much more advantageous in cases of very unexpected losses.
Should You Consider This Coverage?
By working with your insurance agent, you can examine the property damage risks that are common in your industry and community. This will help you get a better picture of whether you can benefit from an all-risk policy as opposed to a peril plan.
Compare both insurance policies from your choice of carriers.
Look for property damage exclusions within the peril plan. Then, compare them to any exclusions within an all-risk policy.
If you see that a named-peril policy does not adequately cover the property damage that you are likely to experience, then consider an all-risk option.
Don’t forget to also consider the costs of different policy options. Though all-risk plans are often more expensive than named-peril plans, the extra investment is often well in line with the additional protection you need. You may find this a better long-term investment, and you will have to worry less about a property damage scenario for which you have no coverage.
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