Suppose a delivery person is bringing food to one of your employees, and he slips and falls on ice or the stairs on your property. You have enough money to replace the food, but do you have enough money set aside for liability resulting from broken bones or head injuries? How about a lawsuit or damages for pain and suffering?
Even if your employees don’t order food and your office doesn’t have a delivery service, what if a neighboring office catches fire and your files and equipment are destroyed? Would you be able to pay for damages without a significant hit to your business? What if you had to close the office because of the damage? Would you be able to continue with business as usual? If the answer to any of these questions is no, then you need an office package policy.
What is an office package policy?
An office package policy, also known as a business owners policy (BOP), combines property and liability coverages into one policy to cater to the needs of businesses. Our office package policy is tailored to attorneys, which makes it more cost effective and suited to meet the needs of attorneys. Our coverage not only pays for damages resulting from the injury, but also includes defense costs that are provided in addition to the limit. As an attorney, you know how quickly defense costs can add up.
General Liability Coverage
Back to our first scenario above, where the delivery guy injures himself on your premises: Fortunately, if you have an office package policy, it includes general liability coverage (GL).
Depending on the needs of the firm, our GL limits range from $500,0000 per occurrence and $1,000,000 aggregate to $2,000,000 per occurrence and $4,000,000 aggregate, with varying deductibles. If more coverage is needed, we can also quote an umbrella policy for the firm. An umbrella policy is liability insurance that is in excess of specified other policies and also potentially primary insurance for losses not covered by the other policies. (However, an umbrella policy does not extend over the limits of your lawyers professional liability coverage, so be sure those limits are adequate.)
Property Coverage
Apart from GL, the office package policy provides coverage for your equipment or furniture. This can be covered up to your specified limit under business personal property (BPP). If the firm owns the building, we can also provide coverage for the building in the event the building is damaged by a covered peril (e.g., fire). If the firm does not own the building, sub-limits are provided to cover the premises rented to you. Since many landlords require that their tenants show they have coverage, we can easily issue a certificate to satisfy your landlord’s requirement.
Income and Other Expenses Coverage
The office package policy also offers business income and extra expense coverage. The business coverage will replace income and expenses such as rent or payroll due to suspension of business operations resulting from a covered cause of loss (e.g., business closure due to fire, as in our second scenario above). The business income is subject to a 72-hour deductible. On the other hand, extra expense coverage begins immediately and covers necessary expenses that would not be incurred if the loss had not occurred (e.g., expenses to replace or restore lost information).
Coverage Summary
As mentioned earlier, our office package policy contains multiple coverages that are tailored to your business needs. Here is a summary of some of the coverages available:
Property Coverage
- Full Replacement Cost
- No Coinsurance
- Business Income and Extra Expense
- Actual loss sustained up to 12 months
- No waiting periods
- Billable hours option up to $50,000
- Dependent properties – $50,000 limit, can be increased
- Ordinance or Law
- $250,000 limit
- Increased cost of construction
- Demolition
- Loss of value to undamaged building
- Interruption of Computer Operations
- $100,000 aggregate limit, can be increased
- Claim Data Expense
- $10,000 limit
- Equipment Breakdown
- Newly Acquired Property
- Up to 180 days
- Building – $1,000,000 limit
- Business personal property – $500,000 limit
- Business income and extra expense – $500,000 limit
- Property Off Premises
- Up to business personal property limit and 180 consecutive days
- Valuable Papers
- $100,000 blanket limit, can be increased
- Flood and earthquake perils covered
- Accounts Receivable
- $250,000 blanket limit, can be increased
- Flood and earthquake perils covered
- Fine Arts
- $100,000 blanket limit, can be increased
- Includes architectural models at full replacement cost
- Limited exclusions
- Computers and Electronic Data
- Worldwide coverage territory
- Up to business personal property limit on premises and $50,000 for off premises and electronic vandalism (up-to-date virus software and 72-hour data backup required)
- Head crash, flood, earthquake, utility services, mechanical breakdown, and artificial electricity are covered perils
- Identity Fraud
- $25,000 limit
- Outdoor Property
- $10,000 limit
- Water Backup and Sump Pump Overflow
- $25,000 limit, can be increased
- Money and Securities
- $25,000 limit, can be increased
- Employee Dishonesty
- $50,000 limit, can be increased
Liability Coverage
- Medical Payments
- $10,000 limit
- First Aid and Good Samaritan Services
- Damage to Premises Rented to You
- $1,000,000 limit
- Perils expanded to include fire, water, smoke, lightning, and explosion
- Non-Owned Watercraft Liability
- For watercraft up to 75 feet
- Blanket Additional Insureds
- Lessors of premises and leased equipment
- Amended Bodily Injury
- Definition expanded to include mental anguish
Optional Liability Coverage Endorsements Available
- Hired and non-owned auto liability
- Separate limit of liability-excess basis
At OAMIC, we understand the challenges that law firms face and work to ensure our members are provided with the right coverage to meet their needs. The office package policy provides assurance and ensures continuity if a covered cause of loss is experienced by the firm. If you’re interested in how to further protect your business with an office package policy, complete an application and we’ll quote a customized policy for you.
Author
Zindaba has been at OAMIC since 2017. With an MBA from the University of Central Oklahoma, she is responsible for analyzing the financial costs of risk. She has her Associate in General Insurance and is working toward an Associate of the Casualty Actuarial Society. Before coming to OAMIC, she worked in research for a university, in addition to being an actuarial assistant at another insurance company.