Limits to Carry on a Business Owner Policy
What limits should my architecture/engineering firm carry on our business owner policy? This is a very good question and one that does present itself from time to time. There are several parts of the policy therefore different limits need to be considered for each portion of the business owner policy or bop.
General Liability limits are an area of the policy to decide on with regards to limits. The business owner policy premium is based on your firm business location. The landlord of your business location may ask for specific limits of liability on the general liability. The most common limits on this policy are $1,000,000 per claim/$2,000,000 aggregate and $2,000,000 per claim/$4,000,000 aggregate. Your firm’s contracts may also have a request for specific limits on general liability.
Another area of the policy to think about what limits your firm may need is the automobile liability or hired and non-owned auto. Typically these limits follow the general liability limits, if your firm has $1,000,000 per claim on general liability the auto liability limits will be $1,000,000 per claim. The auto liability is an added benefit and many times is required by contract.
Building limits may also be a part of the business owner policy. If your firm owns a building then your firm may be required by the bank or lender to have a specific limit for the building. Otherwise this amount can be determined by how much it would cost to rebuild in a total loss.
Business personal property is another section of the bop. The best way to think about business personal property is if you were to take your office and dump it upside down, everything that would ‘fall out’ would need to be covered. Typically firms have an inventory list for accounting purposes and this is helpful in determining the amount.
There are several portions of the bop to consider for limits on property and liability. If you have questions please call or email your Professional Underwriters agent.