A Business Owners Policy Provides Convenient Peace of MindOctober 29, 2015
If you’re a small business owner, one of your biggest worries may be what happens if something goes wrong. Someone could slip and fall in your store, hurt himself with your product, or file a lawsuit against you for a contractual dispute. Or, what would happen if one of your employees got hurt, there was a fire in your office, or your delivery vehicle was in an accident?
A business owners policy, or BOP, protects your business from a variety of risks. It combines protection against most major property and liability risks into one package. Depending on your business needs, you can also add more specific coverage for a variety of other liability to the policy package. A BOP is usually more convenient and cost-efficient than buying policies for each individual type of coverage. Having an experienced insurance agent customize a BOP to your business’ needs also ensures that you have the coverage you need without any gaps or omissions.
What does a basic BOP usually include?
A basic BOP typically provides coverage for:
- Buildings and contents owned by the company: This coverage typically allows you to recover the replacement cost for damage to company-owned buildings, company-owned personal property, and some business owners' personal property. You can choose standard coverage or arrange for special coverage, depending on the nature of the premises and contents and how comprehensive you need the coverage to be.
- For example, a travel agency would likely carry standard coverage, since its office likely has furniture, computers, etc. but no specialized equipment or product for sale. A dentist’s office, however, might carry special coverage because of its medical equipment, and a boutique that sells high-end watches might carry special coverage due to the nature and value of its merchandise.
- Business interruption insurance: This coverage covers the loss of income resulting from a fire or other catastrophe that might disrupt the operation of the business. It can also reimburse you for the extra expense of operating out of a temporary location while repairs are made or relocation occurs.
- General liability insurance: Covers your company's legal responsibility for the harm it may cause to others. This harm is a result of things that you and your employees do or fail to do in your business operations that may cause bodily injury or property damage due to defective products, faulty installations and errors in services provided.
What doesn’t a basic BOP cover?
A basic business owner policy will most likely NOT cover professional liability, auto insurance, worker's compensation or health and disability insurance. You will need separate insurance policies to cover these subjects. Some suggestions that you may want to add on to your basic BOP coverage package are:
- Workers' compensation: This type of coverage provides wage replacement and medical benefits to those who are injured while working. In exchange for these benefits, each employee gives up his rights to sue his employer for the incident. Most businesses are required to carry workers’ compensation insurance if you have employees; penalties for not doing so can be very stiff, and not having this coverage can expose your business to a great deal of legal liability.
- Commercial auto insurance: If your company uses vehicles to transport employees, products or equipment, you should protect yourself with additional insurance. A commercial auto insurance can insure company-owned cars, SUVs, vans and trucks from damage and collisions. If you do not have company vehicles, but employees drive their own cars for company business, a non-owned auto liability policy can help protect the company in case the employee does not have insurance or has inadequate coverage.
- Professional liability insurance (aka errors and omissions, or E&O coverage): Professional firms such as lawyers, accountants, real estate agents, insurance agents, and even hair salons (to name just a few) should consider carrying coverage that provides defense and damages for improperly rendering professional services. Most general liability policies do not provide this protection, which can be invaluable in case of a lawsuit.
- Directors and officers (D&O) insurance: If a director or officer of your company faces legal action as a direct result of his or her actions on the job, this type of insurance can cover costs of defense, settlement or verdicts costs, and other damages.
- Data breach: With today’s modern technology, so much of your company’s information is stored online. If you store sensitive or non-public information about employees or clients on your business computers or servers, you are responsible for protecting that information and potentially liable for a breach or unauthorized use of that data. Data breach coverage can insure you against the costs associated with rectifying a breach and liabilities you may incur.
Additional BOP add-on policies may also be appropriate, depending on the nature of your business and industry.
How do I figure out if a BOP is right for me?
All small businesses – including retail stores, restaurants, independent contractors, and professional agencies – typically need a small business BOP to safeguard against unexpected financial losses and liability. Conducting a risk assessment with an experience insurance agent can help you identify the policies that are right for your small business.
Jones Insurance offers many different kinds of insurance from a variety of local and national insurance carriers. If you’re looking for a business owners policy in Des Moines, contact us today. We can help you with risk assessment and designing a policy to meet all your BOP and other insurance needs for your Iowa small business.
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