Why an All-Risk BOP is a Good Idea

Insuring a small business usually means investing in a business owners policy (BOP). Your plan will contain property insurance that is designed to assist you in the event of unexpected damage to your assets. However, all plans will include limitations on the types of losses that they might cover. Still, some plans are more expansive than others, and if you want a high degree of coverage against the widest range of potential losses, then you need a benefit known as all-risk coverage. Here's how it works. a close up of a sign

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 might include fires, severe weather, vandalism or theft and most property benefits will insure you against these perils.

However, when you take out an all-risk BOP, you will find that you have a coverage for a very expansive list of perils. The policy is written in a way so that it will cover 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, then 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 named peril plan, your policy will only cover a specific list of hazards, with every other potential loss excluded. Therefore, an all-risk plan will prove much more to your advantage in cases of very unexpected losses.

Should You Consider This Coverage?

By working with your insurance agent, you can take a close look at the property damage risks that are common in both your industry and community. Therefore, you’ll be able to get a better picture of whether you can benefit from an all-risk policy as opposed to a named-peril plan.

Here’s how to do so:

Compare both insurance policies from those offered by your choice of carriers.

Look for property damage exclusions within the named 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 asking your agent for an all-risk option.

Additionally, don’t forget to consider the costs of the 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 that you need. Therefore, you’ll often find this a better long-term investment, strategically speaking, and you will have to worry less about being caught in a property damage scenario for which you have no coverage.

Why an All-Risk BOP is a Good Idea

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