What coverages does a business owners policy provide?


Business owners policies are written on an open-peril basis to cover any direct physical loss to buildings and business personal property of the named insured, except those perils excluded from the policy.

If the prospective business owners policy buyer wishes to purchase a more limited cause-of-loss coverage, such is available through a special named-peril form policy rider.

Business Owners Policy Coverages

A business owners policy drafted by the Insurance Services Office (ISO) contains the following coverages:


This coverage includes all buildings and completed structures specified in the policy declarations, permanently installed indoor and outdoor fixtures and equipment.

Business personal property

All property which legally belongs to the insured and is used for commercial purposes is insured under a business owners policy. In addition, this business owners coverage is extended to protect any property that belongs to others but is temporarily in the custody of the insured or which the insured is contractually responsible to protect.

A business owners policy also contains an exterior building glass clause under which exterior building glass owned by the named insured if the insured is a tenant, is covered by the policy.

Other business owners policy coverages

A prospective business owners policy buyer can choose one or more of the following additional coverages:

  • Collapse;
  • Removal of debris;
  • Fire department charge coverage;
  • Clean-up of pollutants;
  • Damage caused by water;
  • Business income coverage;
  • Counterfeit money;
  • Forgery;
  • Ordinance or law coverage;
  • Electronic data recovery;
  • Coverage for computer operations failure;
  • Coverage for fungi, bacteria or dry rot, etc.

In addition to the coverages listed above, a few optional endorsements can be included in business owners policies for an extra premium. These include coverage for:

  • Money and securities;
  • Mechanical failure;
  • Employee fraud;
  • Outdoor signs and posts.
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