BUISNESS OWNERS INSURANCE

Many people dream of starting a company and becoming their own boss. However, those who run a business, especially when it is small or medium-sized, know that the everyday running of a company comes with a lot of responsibility, uncertainty, and risk. Yet, for a lot of business owners, their business is the sole source of their income. This means that there is a lot at stake and even one setback could be detrimental.

This is where business owners insurance, also known as BOP (business owners policy) insurance, comes in. Making sure that your dream and livelihood are protected can be as easy as just picking out the right policy.

What is Business Owners Insurance?

Business owners insurance protects against property and liability risks by bundling general liability insurance with commercial property insurance. BOP insurance typically combines the main policies at a cheaper price than the total cost of the individual coverages. It can be tailored to a business’ individual needs and is ideally suited for small and medium-sized businesses. Here are some examples of the types of businesses that benefit from it:

Apartment buildings
Bakeries
Beauty parlors
Contractors
Florists
Offices
Pet salons
Restaurants
Retail stores
Technology consultants
Wholesalers

For people who own businesses such as restaurants, wholesaling, retail stores, and contractor businesses, BOP insurance is an especially important form of protection. These ventures usually come with a higher level of risk, which means their owners are more likely to face unexpected expenses at one point or another.

What Does BOP InsuranceCover?

BOP insurance usually provides three main types of coverages:

Business property coverage– covers the buildings themselves, as well as any movable items inside. The objects, e.g., desks, computers, and stock items, are referred to as “business personal property.” Additionally, when damages occur, property coverage will also cover debris removal, the loss of income, and cleaning up pollution.
Business liability coverage – includes protection against a range of liabilities, such as advertising injuries (e.g., slander and copyright infringement), customer injuries, property damage, and product-related claims, that are committed accidentally. If you get sued for liability losses, including libel and slander, your defense costs will be covered.
Business interruption coverage – protects the income of a business in the event of a fire or other catastrophe that stops the company from operating. It might also cover the expenses related to operating out of temporary locations.

In addition to the main policies listed above, business owners can opt-in for a range of additional coverages:

Accounts receivable – protects from the loss of income when customers fail to pay their bills.
Commercial auto insurance –covers the cost of an accident you or an employee caused while driving a company vehicle. See More
Crime insurance – covers the losses resulting from crimes, such as burglary, forgery, computer fraud, and employee dishonesty to name a few.
Cyber liability – covers cyberattacks and damage to computer systems or electronic data.
Employment practices liability – offers protection when an employee files a lawsuit against you.
Errors and omissions coverage – covers any negligent acts, errors, and omissions during business activities that result in financial loss and lead to a client lawsuit.
Umbrella insurance – increases your liability policy limits.

What Does BOP Insurance Not Cover?

In regards to property protection, you will not be covered when damage is caused by earthquakes or flooding. To also have coverage in those situations, you would need event-specific insurance policies. Additionally, a BOP does not cover injuries to a business’ employees. They will need specific workers’ compensation insurance.

How to Qualify for BOP Insurance?

You might think that every business automatically qualifies for BOP insurance, but in reality, you also need to meet specific eligibility requirements. The criteria differ between insurance providers, but usually include business location, the size of the location, the business class, and total revenue:

If, for instance, some of the business is handled off-premise, then some insurance providers may refuse to issue a BOP. Additionally, the size of the business premise is also taken into consideration. Limits are placed upon business premises that are both too large and too small. That is why BOP insurance is typically only suitable for businesses like restaurants and retail shops – they naturally tend to meet each criterion.

As a general rule, businesses eligible for BOP insurance typically have fewer than 100 employees, make less than $1 million annually, and belong to a low-risk industry.

How to Save Money on BOP Insurance?

BOP insurance is designed to save you money in the event of a problematic situation, but you can also save money on the policy itself. There is a range of factors that goes into determining the price of BOP insurance. Follow these tips to lower your premiums:

Multiple policies– If you already have a provider for multiple insurance policies, ask if you can get a bundling discount by combining your policies together.
Shop around– Every insurance provider calculates their risk differently. Hence, you should get quotes from different insurance companies to ensure you get the best possible deal on the market.
Secure your premises – Theft and vandalism are a huge risk to some businesses, e.g., retail shops. When you invest in shutters, burglar alarms, deadbolt locks, and other security measures, you will decrease the risk of any losses and consequently, also reduce your insurance premiums.
Prevent fireFire alarms, fire extinguishers, and sprinkler systems all decrease the risk of severe fire. Add these to your property to lower the risks and also the cost of insurance.
Do not file frivolous claims – Only file a claim when you need to, since your claims history is also factored into your insurance costs. The way the insurance companies see this is that the fewer claims someone has had, the less likely they are to submit claims in the future. This also applies to other insurances, such as homeowners and car insurance.
Increase your deductibles– By increasing your deductibles, you decrease your premiums. However, ensure that the business has enough reserves to pay the deductible when something happens.

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