If you want to remain in business long into the future, it’s extremely important that your business is protected. Accidents or simple mistakes could lead to lawsuits.
Natural disasters, economic crisis, or global pandemics can turn a business upside down overnight.
But with the proper insurance in place from day one, your business will be in a position of strength. Many companies qualify for a business owner’s policy (BOP) that they can put in place to provide as much protection as possible.
What is a business owner’s policy? It’s a bundle of different types of insurance crafted specifically for your business needs.
So how do they work? And what types of coverages are available? That’s exactly what we discuss below. Keep reading to see how you can effectively protect your business today.
Why Your Business Needs Insurance From Day One
Without proper business insurance in place, you are doomed to fail sooner or later. An estimated 36-53% of small businesses are in the process of litigation each year. For most businesses, it’s unfortunately only a matter of time before someone files a lawsuit against you.
Another 9% of small businesses are the victims of theft each year. A large percentage of small businesses also experience property damage from fires, water and ice, wind, and hail.
Many of these costly events can usually be covered by insurance. You never know when something bad might happen. That’s the point.
That’s why insurance is available. It protects you and your business when (not if) something happens.
If your company suffers a major incident in the first one or 2 years of business, that could derail you right away. Don’t take the risk. Ensure your business has a future by getting a business owner’s policy today.
What Is a Business Owner’s Policy and Why Do You Need One?
Think of your personal life; you likely have many different types of personal insurance, or at least, you should. Health insurance for medical emergencies, dental insurance, auto insurance, home insurance or renters insurance, and possibly more.
That’s a lot of different policies to manage and insurance providers you have to deal with. It gets confusing.
Now imagine what it’s like for your business. You are trying to protect your livelihood, as well as that of your employees. Without a BOP, managing your insurance policies can be a full-time job.
But the benefit of a business owner’s policy is that you get multiple important insurance coverages bundled up together. Now you only need to manage one policy and deal with 1 insurance company in the event of making claims.
You only need to make one payment, as opposed to 5. It’s much less of a headache.
On top of that, the bundled insurance is sold to you at a premium that is less than what you’d pay if you bought each policy separately.
So you get the coverage you need to protect your business and your livelihood, you save money, and you have fewer headaches tracking it all. BOPs don’t sound too bad after all, do they?
Types of Business Insurance Coverage Available
So what does BOP cover? You can expect a typical business owner’s policy coverage to include the following.
General Liability Coverage
Liability insurance is extremely important for any business. It covers your legal responsibility should your business activity cause harm or damage to others. It can also defend you if you are accused of an activity that caused harm or property damage.
This would cover both property damage or medical expenses during the normal course of business caused by you or your employees.
Commercial Property Coverage
Commercial property coverage protects your buildings, inventory, and equipment in any circumstance that isn’t specifically excluded in your policy. You are typically covered from natural disasters, fire, crime, and other sources of potential damage.
Business Interruption Coverage
Interruption coverage, or business income coverage, protects your company in the case that some event or disaster causes you to lose income or prevent you from conducting business. This ensures your company doesn’t fail in the midst of temporary circumstances outside your control.
Crime coverage can protect your business in case it suffers a loss from theft due to employee dishonesty. It may be able to cover computer fraud and is usually limited to $5,000 or less of coverage.
Optional Available Coverage
The following coverages aren’t always included in BOPs. It’s possible to add these into your policy if it makes sense for your business and insurance provider.
- Accounts receivable coverage
- Electronic data coverage
- Business Income
- Data Breach Coverage
If you have other types of concerns, be sure to ask if they can be included in your policy.
What Do BOPs Not Cover?
Business owners policies are not intended to cover every possible insurance need. Professional liability, for example, is not covered in the case that you provided erroneous advice. You could be sued if damage arises out of the error you made.
Client damages wouldn’t be covered, in the case you give advice to a client that causes harm. Health insurance, disability insurance, and worker’s compensation are also not covered.
All of these would need separate policies outside of the BOP. Your BOP provider may be able to offer those in separate policies for you.
Not every BOP or insurance provider is the same. Each will have varying requirements in order to qualify for a BOP.
Most BOP providers require that a business conducts all of its business operations on location. This means that a catering company, that serves food around the city, or a traveling media company, may not qualify.
There are typically location, revenue, and commercial property size requirements as well. BOP’s work well for retail stores, restaurants, gyms, or offices.
Protect Your Greatest Asset
As a business owner, your company is your greatest asset. It has the means to provide you with income long into the future should you diligently protect it. It also has the opportunity to provide jobs for others and support our society.
Run your business wisely. Contact us today here or call/text us at (281) 487-9686 for a custom BOP quote.