New from Bonds Express: Business Divorce Insurance offered in partnership with DiPro Insurance.
Protect Your Business When a Professional Relationship Must End
Separating from a co-owner or key employee can be expensive for the business. A Directors and Officers, Employment Practices, Professional Liability, or disability policy may cover the underlying claim, but it usually will not pay the cost of buying out an owner’s interest or providing employee severance.
The Business Equity Protection Plan (BEPP), also known as Business Divorce Insurance, helps address that gap. If a covered claim directly leads to the termination of a partner or eligible employee, BEPP can reimburse the business for certain buyout or severance expenses, up to the selected policy limit.
What Can BEPP Cover?
- Partner buyout expenses: The eligible cost of purchasing a departing partner’s ownership interest.
- Employee severance: Severance paid to a qualifying employee whose termination directly results from a covered claim.
By reimbursing these expenses, BEPP can reduce the immediate strain on the company’s working capital.
Partner coverage limits of $50,000, $100,000, and $150,000 are available. Employee severance limits vary according to the coverage level selected.
How Does Business Divorce Insurance Work?
For BEPP coverage to apply:
- A claim must be covered by an underlying policy identified in the BEPP policy declarations.
- The partner’s or employee’s termination must directly result from that covered claim.
- The business must incur and document an eligible partner-buyout or employee-severance expense.
- The claim and related expenses must be reported within the time required by the policy.
BEPP then reimburses the business for qualifying expenses up to the applicable policy limit.
What Is Not Covered?
BEPP does not replace Directors and Officers, Employment Practices, Professional Liability, or disability insurance. It also does not generally cover:
- Legal defense costs, settlements, or damages associated with the underlying claim
- Recruiting, hiring, or training a replacement
- Claims denied by the underlying insurance carrier
- A separation that is unrelated to a covered claim
- Events, wrongful acts, or disabilities occurring before the BEPP policy began
Who Should Consider Business Divorce Insurance?
BEPP is intended for businesses where the departure of a partner, co-owner, or key employee could create a serious financial burden.
A wide variety of industries may qualify, including contractors, retailers, service businesses, technology companies, financial professionals, healthcare practices, and restaurants.
Request a Quote
Tell us about your business and the coverage you already have in place. We can review the available BEPP coverage options, limits, eligibility requirements, and pricing with you.
Apply Now For a Free Quote!
Coverage is subject to underwriting approval and all terms, conditions, exclusions, and limits contained in the issued policy. This overview is provided for general informational purposes and does not modify or replace the policy.
Eligible Industries by Tier
BEPP pricing is based partly on the type of business being insured. The following examples can help you identify the tier that may apply to your business.
Tier 1
- Contractors
Interior carpenters, carpet and flooring installers, electricians, HVAC technicians, landscapers, painters, plumbers, and similar trades. - Garages
Body shops, detailing businesses, general auto repair, glass installation, oil and lube services, tune-ups, and emissions testing. - Personal Care Services
Barbers, beauty and hair salons, cosmetology schools, day spas, massage therapists, and nail salons. - Printers and Publishers
Bookbinding, commercial printing, electronic media, photocopying, publishing, and screen printing. - Retail Businesses
Appliances, art supplies, auto parts, baked goods, clothing, computers, electronics, furniture, hardware, gifts, home, and garden retailers.
Tier 2
- Manufacturers
Food products, metals, plastics, rubber goods, technology parts, and similar manufacturing operations. - Pet Care Services
Veterinarians, pet grooming, pet day care, overnight boarding, pet sitters, and pet stores. - Service Businesses
Dry cleaners, funeral homes, janitorial services, photographers, packaging services, and mailing services. - Technology Services
Computer installation and repair, data processing, internet service providers, IT consultants and schools, web development, software programming, and web hosting.
Tier 3
- Financial Services
Accountants, financial planners, insurance agents, mortgage brokers, stockbrokers, and tax preparers. - Healthcare
Dentists, chiropractors, optometrists, physical therapists, physicians, surgeons, diagnostic imaging labs, and medical spas. - Professional Services
Advertising agencies, graphic designers, claim adjusters, consultants, interior decorators, lawyers, real estate agents, and travel agents. - Restaurants and Food Service
Quick-service restaurants, fast-casual restaurants, family-style restaurants, and fine dining establishments.
These industry classifications are examples based on the current BEPP rate sheet. Final eligibility, tier classification, coverage, and pricing are subject to review by the insurance provider. Contact us if your business is not listed.
Frequently Asked Questions
Is Business Divorce Insurance a surety bond?
Does BEPP replace management liability insurance?
Will BEPP pay the cost of hiring a replacement?
Does coverage pay automatically after a termination?