What does accounts receivable coverage in a BOP provide?

Accounts receivable coverage in a Businessowners Policy (BOP) specifically addresses the risk of losing income due to damaged or destroyed records related to outstanding invoices. This type of coverage is vital for businesses that rely on collections from customers, as the destruction of records can hinder the ability to collect those receivables.

The coverage typically includes reimbursement for the actual amounts that are expected to be collected, which may be difficult to ascertain after a loss. By protecting against the financial impact of lost records, the policy helps ensure that a business can maintain its cash flow and operational viability even after a damaging event occurs.

In comparison, coverage for property damage and unpaid invoices has different implications. Property damage coverage typically relates to physical damage to business assets, while unpaid invoices do not factor into this specific type of insurance provision. Legal expenses are also unrelated, as they cover legal liabilities rather than the financial impact of uncollected receivables due to record loss.