What coverages are provided under section 1 and section 2 of the business owners policy?

The business owners policy (BOP) is structured into two sections that provide distinct types of coverage, which is vital for protecting small business owners' interests. Section one specifically addresses property coverage. This includes coverage for buildings, personal property, and additional property-related risks such as loss of income due to a covered peril affecting the physical property.

Section two, on the other hand, focuses on liability coverage. This is designed to protect the insured against claims of liability for bodily injury or property damage that may arise from the business operations. It covers legal expenses and settlements if the business is sued by a third party.

Understanding this distinction is critical, as it underlines the comprehensive nature of the BOP. It allows business owners to protect both their physical assets and their liability risks under a single policy, streamlining their insurance needs and potentially reducing costs.