Save Money With A Business Owners Policy (BOP)
Dan Levenson January 14, 2016
We understand—insurance is expensive for small businesses. When you’re trying to keep your company afloat, your employees paid, and your customers happy, increasing costs in any area of your business can be a great source of stress.
Luckily, a business owners policy (BOP) can provide the common types of coverage that any business needs under one policy, saving you valuable funds.
Some of the types of insurance provided by such a policy include:
Commercial Property Insurance
This is a type of insurance any business needs to protect against damage from such things as windstorms, hail, fire, and other natural disasters. This will also help protect your personal business property, such as computers, and replace lost business income.
Learn more about commercial property insurance.
General Liability Insurance
This protects the assets of your business and pays for expenses and obligations, such as medical costs if a customer or client is injured on your property. It will also protect your business if you or your employees cause an injury or property damage.
General liability insurance pays for the expenses of your legal defense and any settlement or monetary award granted if someone successfully sues you. Such damages could include compensatory damages, or money granted to a plaintiff to compensate for injury, damages, or another type of loss. Other damages could include nonmonetary losses an injured party would suffer and punitive damages a court would grant to punish you for wrongdoing.
This insurance could also protect you against claims of misleading or false advertising, such as slander, libel, or copyright infringement. In addition, it would protect you against your financial responsibility as a tenant if you are responsible for damage to a property you rent, such as a fire.
Learn more about general liability insurance.
Business Interruption Insurance
Business interruption insurance is coverage that will replace lost income your company might suffer after a disaster. This could be income lost after a business has to close because of a disaster or any rebuilding necessary after the disaster.
Such insurance might be needed after a fire has greatly damaged your business, making it impossible to do work there for some time, or similar damage that might happen after any natural disaster, such as a windstorm.
Learn more about business interruption insurance.
BOPs can also include other, more specific types of insurance depending on the nature of your business, including:
- Equipment breakdown insurance – This covers your business if mechanical issues, power surges, operator errors, or burnouts cause equipment to break down.
- Medical payments coverage – This will protect you from medical expenses you incur when others are injured on property you rent or own.
- Rented vehicle coverage – This will protect vehicles that you lease, borrow, or hire.
What A BOP Won’t Cover
BOPs can save small businesses a lot of money by combing several types of coverage into one policy, but they will not provide all the insurance a company might need. They will not provide:
- Professional liability coverage, which protects a business against claims of giving incorrect advice or a failure to perform professional services, which could lead to a lawsuit. It pays expensive legal fees, which could be costly to a small business.
- Health and disability insurance, which any business with employees needs. The government required businesses with 100 or more employees to provide health insurance as of January 1, 2015. As of January 1, 2016, companies with 50-100 employees have to provide the insurance. Disability insurance provides an income to employees who are injured or become sick and are unable to work. Companies can buy long-term disability insurance, or short-term disability insurance, or both.
- Workers compensation insurance protects employers if a worker suffers an on-the-job injury or illness. Every state except Texas requires it, and even in that state, although employers may opt out of such insurance, 65% of businesses provide the coverage.
Combing policies can save money, which is where a business owners policy can come in handy for any small business. If you have any questions about a business owners policy, or anything else related to business insurance, feel free to contact us.