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Chiropractors who have their own office buy a type of insurance coverage called a Business Owner’s Policy (BOP). This is a package policy that covers major property and liability exposures (as required by landlords) as well as a loss of income if your business cannot operate for a period of time.
For example, if your office’s roof is damaged during a thunderstorm, causing your office to flood and your business to close for two months, a BOP would provide coverage in several ways.
The policy would cover the cost of repairing the roof, cleaning up water damage and repairing or replacing your furniture, computers, equipment and supplies. A BOP also would cover your payroll and taxes for the two months the business was closed. And if one of your clients was in your office during the storm and was injured by falling debris, a BOP would cover your customer’s medical bills.
Buying a BOP can be a good deal for a business owner. The policies often provide more complete coverage at a lower price than separate policies would for each kind of coverage.
A BOP covers major property exposures, liability exposures and business interruption.
Property coverage generally includes owned or leased buildings; the contents of buildings, such as furniture, supplies, fixtures, machinery, equipment, inventory and building improvements; glass and signs; and some property off of the premises.
Property insurance can be bought based on the property’s actual cash value (its replacement cost minus depreciation), its current replacement cost or another agreed-upon amount, such as an appraisal.
Liability insurance covers your business if it is sued for something the business did or failed to do that caused injury or property damage to someone else. Liability insurance covers damages and settlements stemming from a lawsuit, up to the policy limits. Many liability policies also cover attorneys’ fees and other costs associated with defending against a lawsuit.
Business interruption coverage can pay for your business’ fixed costs, such as rent, payroll and taxes, if your enterprise suffers a property loss that causes it to close or slow down for a period of time while repairs are made.
What Isn’t Covered?
Usually a BOP doesn’t cover damage due to earthquakes or floods; workers’ compensation; group health, life or disability insurance; insurance for company-owned vehicles; and specialized liability risks such employment practices (except in some policies) and malpractice.
What Affects the Cost of the Policy?
Insurers use rating formulas to determine the policy premium. For a Business Owner Policy, insurers consider several factors, including the type and location of the business; the building’s age, construction material and security features such as alarms and sprinklers; the business’ claims history; and the business’ financial stability and management team. Rates also vary depending on a policy’s coverage limit.
ChiroSecure through the under writers we utilize has assembled products for Health Care offices for you to choose from. We work with companies that have great products for Health Care Offices so we can assist you to get the right coverage from the right insurer.
Umbrella insurance is also known as “excess liability” insurance. Umbrella Liability applies excess over primary liability policies and provides additional limits of liability in a cost effective fashion. The primary policies are called “underlying” policies and are specifically scheduled, along with their limits, on the Umbrella policy.
The underlying policies are typically the primary General Liability and Auto Liability policies. The Employer’s Liability section of the Workers’ Compensation policy is also a common underlying coverage.
Primary General and Auto Liability policies commonly have limits ranging from $500,000 to $2,000,000. In the litigious climate of the U.S., those limits are often insufficient to adequately protect a business from a serious premises claim, product liability lawsuit, or auto accident.
Umbrella policies are intended to cover a variety of liability losses that are also covered by the primary policies. The Umbrella coverage attaches at a predetermined level of liability limit, i.e., when a covered loss exhausts the primary policy’s per occurrence limit.
For example, assume the primary General Liability per occurrence limit is $1,000,000 and the Umbrella liability policy limit is $5,000,000 excess $1,000,000. There is a covered loss of $3,000,000. The primary General Liability policy will pay the first $1,000,000 (the policy limit) and the Umbrella policy will pay the remaining $2,000,000.
Some Umbrella policies will also “drop down” and apply on a primary basis, excess of a Retained Limit (deductible), for claims not covered by the primary policies. This is called Coverage B on the Umbrella policy. However, generally speaking, most Umbrellas will respond only to claims that are covered by the primary policies.
What Isn’t Covered?
An Umbrella policy is strictly third-party liability coverage; it does not apply excess of property, crime, or other first-party coverages. Most Umbrella policies will exclude Employment Practices Liability, Professional Liability, Product Recall, Asbestos, Pollution, War and Terrorism.
What Affects the Cost of the Policy?
Underwriting for Umbrella Liability insurance is customized for each individual policyholder. As with primary General Liability, the more hazardous the Insured’s operations, the higher the Umbrella premium will be.