Business Owners Package Policy is a combination of property, liability, and business interruption insurance. It is usually written to cover expenses of small and medium size businesses resulting from (1) damage or destruction of business's property or (2) when actions or non-actions of the business's representatives result in bodily injury or property damage to another individual(s).
Businesses that qualify under this heading include office buildings three stories or under not to exceed 100,000 square feet; apartment buildings six stories or under not to exceed 60 dwelling units; any other buildings not to exceed 7500 square feet for mercantile space, occupied principally as an apartment, office, or engaging in trade or commerce. Properties that cannot be insured under this policy include banks, condominiums, bars, restaurants, automobiles, recreational vehicles, contractor functions, and manufacturing operations.
Liability Coverage:
Coverage that protects a business, up to the policy limits, if actions or non-actions of the insured result in a legally enforceable claim for bodily injury, property damage, or personal injury. Included are coverages for: (1) non-owned automobiles used by the business in its normal operations (owned automobiles are excluded); (2) host liquor liability where the business is having a social gathering. For example, liability at an office party would be covered, since this social function is incidental to normal business activity (excluded would be operation of a liquor store on the premises of the business); (3) fire and explosion legal liability, where the insured is renting business space in a building. If a fire or explosion from business operations is proven to be of negligent origin, the insurer of the owner of the building has subrogation rights against the business; (4) products, for which completed operations coverage is provided. Excluded from Section II coverages are professional liability, owned automobiles of the business, operation of airplanes and other aircraft, Workers Compensation, liquor liability (other than that served as a host at business social functions), and off-premises operation of boats.
Property Coverage:
A contract that details coverage for business property losses in three specific areas:
Coverage A (Building). All buildings on the site are covered with no coinsurance requirement and on a replacement cost basis to include: the buildings themselves; the owner's personal property used to maintain the building(s) and provided to tenants; permanent fixtures, equipment and machinery; improvements and betterments by tenants; removal of debris; and outdoor furniture and fixtures.
Coverage B (Personal Property of the Business). All personal property used in the business on the premises, as well as personal property of others under the care, custody and control of the owner of the building used to operate the business; and limited coverage for items temporarily away from the premises of the business as well as for property purchased and placed at a new business location.
Coverage C (Loss of Income). Reimbursement for loss of income because of inability to collect business rent; interruption of normal business functions; and extra expenses associated with resuming normal business activities as the result of the damage or destruction of business property by an insured peril. (Optionally, under Section I, coverage can be extended to insure against burglary, robbery, theft, employee dishonesty, and boiler and machinery explosion. Earthquake damage can be covered through an endorsement.)
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