Business insurance provides financial protection against risks, which are a normal part of doing business. Almost all small businesses need general liability, property, and business interruption coverages. Many insurers package these together into a business owner’s policy (BOP).
Whether your company is large or small, accidents can happen and lawsuits may arise. The best way to protect your business is with the right coverages and a reputable insurer.
Business Owner’s Policy (BOP)
A BOP is an insurance package that offers businesses several policies rolled into one, saving them cost by eliminating the need to purchase individual business insurance policies. It includes commercial property insurance, general liability, and business interruption or crime coverage.
Commercial property coverage protects business property, such as a store’s furnishings or equipment, landscaping, outdoor signage, and other properties that are proximal to the store’s building structure. General liability coverage pays for a business’s legal expenses when someone is injured on the premises or as a result of a service provided by the company. Business interruption or crime coverage is added to cover the loss of income caused by a disaster that interrupts or destroys your business’s operations.
While most companies can benefit from a BOP, there are some limitations. Most insurance providers will not offer this policy to businesses that handle all of their business off-premises, and some have parameters based on the location, size, revenue, or class of the business when it comes to the types of property they will cover.
Additionally, some policies are excluded from the BOP, such as professional liability or workers’ compensation. If you have a specific risk that isn’t covered by the BOP, then you can usually purchase additional coverages for an extra cost. However, it’s best to work with an agent or broker to determine if a BOP is right for your business.
General Liability
Liability coverage protects your business financially if you harm or are accused of damaging someone else’s property. It’s especially important for businesses that interact with customers or clients face-to-face, such as restaurants and retail stores, but all companies need it to some extent. Without it, a simple slip-and-fall could cost your company millions.
General liability is a foundational coverage that’s available through the majority of business insurance providers. Some companies sell it as part of a BOP, while others offer it as a standalone policy or as a component of other policies like crime and commercial property.
Also known as commercial general liability (CGL) insurance, it protects your business from common accidents that can occur while running your business. That includes bodily injury claims, such as when a customer slips and falls in your store or office. It can also cover property damage claims, such as when a client’s property is damaged while you’re working on site. It may also protect you against accusations of reputational harm or false advertising, such as if your business is sued over a defamatory tweet or copyright infringement claim.
You can get a general liability quote quickly and easily online from most business insurance providers. Some even let you purchase a policy directly through their website. However, be aware that the lowest-cost option may not provide enough coverage if your business faces a large lawsuit. For this reason, it’s often a good idea to compare quotes from multiple providers.
Property Insurance
The business insurance industry offers property coverage to protect businesses from financial loss related to theft or destruction of their physical assets, products or services. This is one of the most essential forms of business insurance, and nearly every business should have it. To obtain this form of coverage, companies must meet the insurer’s underwriting requirements, which can include a combination of facts about the business and its history with property losses. Businesses that are viewed as inherently risky or with a history of frequent property losses may not be able to obtain the coverage or may have to pay a higher premium for it.
The cost of insurance varies depending on the risks associated with each business, but many companies can save money by purchasing multiple types of business insurance coverage together in a single policy. The most popular option is a business owner’s policy, which combines property, general liability and business income insurance into one convenient package. Other coverages that are often purchased individually or as part of a business owners’ policy include workers’ compensation, commercial auto and crime.
Some businesses may require specialized coverages to satisfy licensing or regulatory requirements. For example, real estate agents and dentists should have professional liability insurance to fulfill the requirements of their licenses, while liquor liability coverage is usually required by law for bars and restaurants. Other specialized coverages that are sometimes bought by small businesses include surety bonds, which guarantee the fulfillment of a contract or commitment, and fidelity bonds, which help cover expenses due to employee theft or fraud.
Business Interruption Insurance
Business interruption insurance can help cover costs associated with a sudden loss of income and ongoing operating expenses that could lead to your company’s shutdown. This coverage will help cover wages for employees who aren’t able to work, rent for temporary locations and the cost of equipment necessary to relocate or open back up. It can also help pay for a damaged reputation and other related expenses. This type of coverage is often tied closely to your commercial property policy and the same perils that are covered by the former will be covered by the latter.
There are a few criteria that must be met for this type of coverage to kick in. The first is that the damage must be caused by one of the perils listed in your commercial property policy. Floods and earthquakes are examples of events that would typically not trigger this coverage. Second, there must be a direct physical loss that causes the delay in your company’s operations. A fire that destroys your restaurant’s kitchen or a hurricane that rips off the roof are examples of this kind of damage.
Finally, the interruption must last a specified amount of time, known as the restoration period. This is typically a maximum of 72 hours. However, this time frame can be extended for a year or more depending on the policy and the individual insurance agent.assurance entreprise