Does a BOP cover damages from natural disasters?

Complete Guide to BOP Coverage for Natural Disasters

Why This Question Matters for Colorado and Utah Residents

Northern Colorado and Utah face some of the highest property risks in the nation due to frequent hailstorms (June is peak season), wildfires (especially July–September), and flash flooding—especially after wildfires. Knowing what your Business Owner’s Policy (BOP) does and does not cover helps you avoid catastrophic out-of-pocket costs. Here’s why it’s critical:

• Regional Perils Are Growing: Colorado ranks #2 nationwide for hail claims, and Utah faces frequent spring flooding and snowmelt risks.
• Standard Policies Exclude Major Events: Most BOPs in CO/UT exclude flood and earthquake by default, requiring separate policies or endorsements.
• Economic Impact Can Be Severe: Without proper endorsements, a single disaster can close a business for months—average uninsured losses from hail or flood can exceed $60,000.

What Most People Get Wrong

Many assume a BOP provides “blanket” protection for all disasters. In reality, standard BOPs only cover named perils (like fire or windstorm), not floods or quakes. Colorado and Utah business owners often discover too late that their policy excludes flood damage—especially in wildfire burn zones where the risk is doubled. Another common oversight is not updating coverage as business assets grow or as regional risks shift.

Additionally, over two-thirds of businesses locally do not carry adequate business interruption protection—leaving them exposed if a disaster forces them to close temporarily.

The Complete Picture

A typical BOP in Colorado or Utah will cover property damage from fire, hail, and windstorm—some of the most common regional losses. However, flood and earthquake coverage are almost always excluded. Given Colorado’s record-setting hailstones (up to 4.5 inches!) and post-wildfire flood advisories, adding the right endorsements is essential for meaningful protection.

Other vital add-ons may include ordinance or law coverage (for rebuilding to code), equipment breakdown, and most critically, business interruption insurance to cover lost income during forced closures. Many business owners choose a $500–$2,500 deductible with annual premiums averaging $800–$3,000 per $1M in coverage (higher in high-risk zones), based on our most recent regional data.

Smart takeaway: Review your BOP details annually with a local expert, and routinely inquire about flood and earthquake options—especially if you’re in a wildfire-prone or flood zone.

Making the Right Decision for Colorado and Utah Residents

Question 1: What natural disasters are most likely at my business location?

Start by asking which regional events are a genuine threat:

• Is your property in a hail corridor (e.g., Weld or Larimer County, CO)?
• Are you near wildfire-prone foothills (e.g., Boulder, CO or Park City, UT)?
• Does your area experience frequent flooding (e.g., post-fire Salt Lake City neighborhoods)?

Assess risks using local data and ask for a map review before renewing your policy.

Question 2: How much would it cost to repair, replace, or reopen after a major local disaster?

Calculate the likely costs of regional perils:

• Average hail claim in Northern Colorado: $20,000–$60,000
• Small business flood loss: $35,000–$100,000 (uninsured)
• Rebuilding to code after a wildfire may add 15–50% to usual costs

Check your BOP’s limits, endorsements, and deductible, and always get clear written confirmation of covered and excluded disasters.

Question 3: Are all exclusions addressed and are the right endorsements added?

Don’t assume your BOP “automatically” adapts as your business or local risks change. Ask:

• Does my policy specifically list included and excluded perils?
• Do I have flood, earthquake, or ordinance/law endorsements tailored to regional risk?
• Am I carrying enough business interruption coverage for months-long closure?

For Colorado and Utah, annual policy review with an independent advisor is your best safeguard.