Everything You Need to Know About Business Owners Policy Insurance
Companies must have adequate business insurance to protect them financially when unexpected incidents occur. A crucial component of an effective business insurance strategy is what’s called business owners insurance—also referred to as a business owners policy or BOP insurance.
Having a BOP in place can help shield your company from the costs associated with many types of business risks. Here, we’ll answer questions like, “What is a business owners policy?” and “What does a business owners policy cover?” This article will walk you through the coverage and tell you exactly why it may be important for you to have business owners policy insurance as a part of your overall insurance strategy.
What is Business Owners Policy Insurance?
Business owners policy insurance is also called property & liability insurance or sometimes BOP insurance. That’s because, in addition to covering costs associated with liability, they can pay for certain business property repairs or losses and loss of business income as a result of a covered event.
Almost every business faces these risks, so insurers often conveniently combine the coverages into one policy. Business owners policy insurance is something every business owner should consider.
Small Companies Benefit From Business Owners Policy Coverage
Nearly every type of company can benefit from a business owners insurance policy, as it is a critical form of insurance combining different types. Small companies may find business owners policy coverage especially helpful.
In particular, you may need a BOP if you:
- Have a physical location. Most, but not all, companies have an office, warehouse, or other space where incidents can occur.
- Have assets that could be damaged or stolen. The temporary or permanent loss of any type of business property can affect your operations.
- Could be sued. Few businesses are immune from this risk. Unfortunately, people who are injured at your business location or whose property you damage may resort to litigation rather than working with you to resolve the issue.
So, you can see why many business owners purchase and maintain business owners insurance policies. Without a BOP, you open your business to taking on large financial burdens associated with liability or physical property losses.
We provide business owners insurance policies for a long list of industries and business types, including:
- Accounting firms
- Auto service providers
- Bakeries
- Cleaning and janitorial services
- Consultants
- Construction companies and contractors
- Electricians
- IT companies
- Landscaping companies
- Liquor stores
- Medical offices
- Restaurants
- Transportation companies
- And many others
Having a single insurance policy for business owners that covers several liability and property risks gives stakeholders tremendous peace of mind.
Business Owners Policy Insurance for Startups
A BOP can be a very useful insurance policy for business owners who are just launching their companies. Operating a startup takes a great deal of time and effort, and streamlining (in all its forms) is essential.
Securing coverage for crucial liabilities and property damage in one convenient policy can save time and money. But just as importantly, it can reduce a busy startup owner’s stress.
One particularly important way it does that is that if damage to covered property disrupts your business, the policy’s “business interruption” provisions can cover expenses related to resuming operations. That includes net income, payroll costs, and even temporary business relocation.
Another reassuring aspect of business owners policy insurance for startups is that the often frenetic pace of activity at these companies can lead to mistakes that create legal liability. A BOP can shield you from the financial fallout of something as common as a visitor suffering an injury at your place of business.
BOPs for Retail Businesses
Another sector where companies often carry business owners policies is retail. A retail outlet is typically a hub of activity, with customers, employees, suppliers, and others continually coming, going, and interacting with one another.
A BOP can help protect store and customer property while shielding the business from the high cost of liability lawsuits. And because a business owners policy can be customized with endorsements (see below), owners and decision-makers can get precisely the coverage they need.
What are the Advantages of a BOP?
The types of protection provided by a business owners policy can be found in other individual policies and all the different types of insurance for business owners. However, combining them in a BOP policy is helpful in a few ways.
First, you get broad coverage in one policy—from liability issues to property-related incidents. Second, managing and using your policy is easier, including that you can report claims for more concerns on one policy. It’s also easy to add coverages like employment practices liability, employee benefits liability, liability coverage for use of non-owned vehicles, etc.
And finally, you may be able to save money since combined coverage is often more cost-effective than individual policies. Consequently, if your business faces both general liability and business-property-related risks, it’s a good idea to talk with a biBERK licensed insurance expert. They can help you decide whether a BOP is right for your company.
What’s Covered Under Business Owners Policy Insurance?
Business owners policy insurance essentially has two components: general liability protection and business property protection. The general liability aspect covers:
The business property aspect of a BOP covers:
Coverage for a wide variety of risks makes a BOP a great fit for many businesses.
What Doesn’t a Business Owners Policy Cover?
A business owners policy, covers property, business income, and general liability. Plus, you can add several other coverages. However, it doesn't cover things like employee injuries, professional errors (sometimes called errors and omissions coverage), or business-owned vehicles.
If you have questions about whether a BOP insurance policy covers a specific risk, be sure to ask us. If it’s not addressed by a business owners policy, we can tell you what type of insurance you need to protect your business from that risk.
What Are Endorsements for Business Owners Policies?
Insurance policies often allow you to add what are called endorsements. That’s true for business owners policies from biBERK.
Endorsements typically enhance a policy in some way. For example, our BOPs can include:
- Industry endorsements. Depending on the type of work you do, there are specific risks that arise as part of conducting business. For example, a restaurant industry endorsement might cover food spoilage. A retail store endorsement might address expenses from having to withdraw merchandise. A lodging (hotel or motel) endorsement might increase your BOPs coverage for fences and signs.
- Risk-specific endorsements. Some businesses have inherent risks beyond those typically covered in a business owners insurance policy. There are dozens of risk-specific endorsements that can add an extra layer of protection when needed. If your business faces unique risks, you should discuss them with one of our licensed insurance experts.
- Higher coverage limits. If you want to enhance your financial protection, you can generally increase the standard coverage limits on your business owners policy.
This type of flexibility is extremely advantageous, especially for small businesses that want to get adequate coverage but only the coverage they need.
Common Business Owners Policy Coverage Endorsements
Some of the specific endorsements we offer with our BOPs are:
Cyber Liability
This add-on insurance protects your business in case of an incident like a data breach involving private customer, employee, or client information. It can also provide coverage for regulatory action defense if a government agency requires you to appear in court.
Hired and Non-owned Auto Liability
If you need protection when you or an employee of your business is driving a rented, leased, hired, or borrowed vehicle for business purposes, this endorsement can provide it. A common example is an employee who makes deliveries using their own car. Adding this endorsement to a BOP means you don’t need a separate commercial auto policy for this purpose.
Employment-related Practices Liability
This add-on protects your business in case of a claim or lawsuit related to inappropriate workplace behavior (e.g., harassment, wrongful termination, discrimination, etc.).
Employee Benefits Liability
This policy enhancement provides coverage in the event of errors or omissions in how you administer your employee benefits program. For example, it can protect you if you fail to add an employee to your medical insurance and the plan later denies the person coverage.
Contractors Installation, Tools & Equipment
This endorsement covers your company’s property, tools, equipment, etc., while at a job site, in transit, temporarily in storage, or during installation.
Liquor Liability
Liability your business incurs related to the selling, serving, or furnishing of alcoholic beverages can be covered by this endorsement. For example, it can provide coverage if your business is found liable because you served a minor or someone visibly intoxicated who subsequently gets into an automobile accident. It can be crucial to any company that sells alcohol, including restaurants, convenience stores, and liquor stores.
Equipment Breakdown/Boiler and Machinery
This add-on covers the unexpected breakdown of electrical systems, air conditioning and refrigeration systems, mechanical equipment, boilers and pressure vessels, and computers. (Note: The loss must be the result of something like a power surge or electrical short. Coverage isn’t provided for equipment that simply stops working.) This coverage can pay for equipment repair or replacement, lost income while equipment is inoperable, costs related to the time and labor required to make repairs, and the cost of food spoilage.
How Much is Insurance for Small Business Owners?
biBERK insurance for small business owners and BOP policies are very affordable. They start at about $500 annually, and most businesses pay less than $2,000. When you consider that even a minor incident can cost tens of thousands of dollars or more to resolve, that rate feels like a bargain.
To determine what you’ll pay for a BOP, you can get an instant, self-service quote online. Your rate is determined based on several factors, including:
How to Minimize Business Owners Policy Insurance Costs
There are steps you can take to minimize your business owners policy insurance cost and insurance costs in general. For instance, simply by purchasing insurance from biBERK, you can save up to 20% over other providers. That’s because our direct-to-you business model cuts out brokers and others, and we pass the savings on to you.
You should also take action to identify and actively manage your business risks. That may involve properly maintaining your work environment, promptly addressing hazards, etc.
As for billing fees, you can avoid them by signing up for automatic payments when you purchase your policy. That way, you don’t have to think about it and will never miss a payment.
How to Purchase Business Owners Insurance
One of the best things about buying a business owners insurance policy from biBERK is that it’s a simple, straightforward process. As noted above, you can get a quote online anytime it’s convenient—while you have your first cup of coffee in the morning, at lunch, between meetings, or in the evening when your day finally slows down.
Then, when you’re ready to make a purchase, you can also do that online. Your policy is typically active the next day, which means that incidents that occur after that and meet your policy parameters can be covered. Any properly insured business owners will tell you that there’s a tremendous sense of relief that comes from knowing your business is protected from unexpected financial losses.
Simplified Online Claims
It’s not just purchasing your business owners policy that’s easy. We also make it simple to manage and use your policy.
That includes reporting claims. You can do that online for maximum convenience. We know how busy business owners are, so we’ve developed processes that are fast, intuitive, and efficient. If you’ve suffered a loss or are being sued, you want assistance not red tape, and we’re here to help.
Other Vital Insurance for Small Businesses
A biBERK business owners policy provides broad coverage. However, it’s important to recognize that your business may need other policies as part of your overall business insurance strategy.
In addition to a BOP policy, we offer:
- Workers’ compensation insurance to cover employee injuries
- Errors & omissions insurance to cover alleged or actual mistakes you make in provide professional advice or services
- General liability insurance to protect you from lawsuits resulting from various actions
- Commercial auto insurance to cover liability related to operating company-owned or leased vehicles
- Cyber insurance to protect you from costs related to data breaches resulting in fraud
- Umbrella insurance to cover the difference between an expense and the a liability policy’s limit
All of these policies are available through the same, convenient process—from the online quote to the purchase and nearly immediate coverage to online claim reporting and policy management.
Check out these important insurance policies for business owners and contact us if you have questions about which are right for your business.
Once your coverage is in effect, you can turn your attention back to running your business. And you can do so with confidence, knowing that biBERK will be here for you should the unexpected occur.
Frequently Asked Questions about Business Owners Policy Insurance
What is a business owners policy?
This is a form of business insurance that combines different types of coverage to protect your property and address liability risks in a single policy. It basically provides all you need to stay covered for many common risks, making it a convenient, stress-free way of ensuring your business is properly protected. A BOP policy protects business owners against most forms of property damage, business interruption, and liability. It’s a policy that delivers wide-ranging coverage and peace of mind.
What is the difference between business owners policy insurance and a GL insurance policy?
It might look like BOPs and general liability policies are pretty similar at a glance. They do cover similar forms of loss and injury, and many business owners might think they’re interchangeable. However, it’s important to be aware of the differences between BOP and GL and what this might mean for you and your business.
First, a general liability coverage policy addresses incidents like bodily injuries, damage to a customer’s property, and advertising claims. If you take a look at BOP policies, they offer general liability protection but also include property insurance for your small business. In addition, they often have equipment and business interruption coverage in the case of an emergency or disaster.
The common policy conditions are found in which section of a BOP?
When you first consider business owners policy insurance, you’ll need to make sure that you’ve read all the terms and conditions. Your BOP package combines different types of coverage into one policy, which means it’s an ultra-convenient policy to have if you’re running a small to medium-sized business.
Within your policy materials are a few different sections describing the terms and conditions. One of these is the Common Policy Conditions section. The Common Policy Conditions section is an essential part of a business owners insurance policy. It helps you understand the general terms and conditions that apply to the entire BOP policy, whether you’ve chosen to include them in your own selection or not.
They’re often standardized across the different insurance carriers to ensure they’re fair and consistent.
So, your Common Policy Conditions section outlines and informs you of all the general terms and conditions that apply to the entire BOP policy. It may include important information like cancellation and nonrenewal provisions, policy territory, and the policy period.
What is a standard deductible on a business owners insurance policy?
An insurance deductible is a portion of an insurance claim that you must pay before a company like biBERK will cover the remainder. It’s a way of sharing the risk between an insurer and their customer. Deductibles help keep overall insurance costs lower and minimize small claims.
If you’re not sure what your standard deductible is, chat with one of our friendly licensed insurance experts here at biBERK. They’ll happily answer questions about the charges you may or may not incur.
Why do I need a Certificate of Insurance (COI) for my BOP policy?
You’ll need a Certificate of Insurance for the business owners policy insurance for your small business because it contains crucial information about it. You may also be asked by a landlord, client, or other stakeholder to prove you have coverage.
A COI has details like the insurance company that issued the policy, the policy number, and the policy period. These details are essential if you’re asked about your coverage.
biBERK is part of the Berkshire Hathaway Insurance Group, which has been providing quality insurance coverage for over 75 years. We’re dedicated to making sure you get the policies you need and have all the information you require to ensure you’re fully protected at all times.
To get a quote, simply visit our website 24/7 or talk with one of our team members during business hours. It’s easy to get coverage and a policy can often be active within 24 hours. And once you have your business owners policy, insurance can be one less thing on your to do list!