A business owner’s policy (BOP) is a combination policy that bundles general liability insurance and commercial property insurance on a single policy. The company you choose to buy your BOP from can be just as important as the details of the policy itself. Read on to learn about four features you should look for when you buy a BOP.
4 Things to Look for When You Buy a Business Owner’s Policy
As you shop for a business owner’s policy (BOP), it’s important to know what to look for in an insurance company. The following are four things you should look for when you buy a BOP for the first time.
Your business is unique, which means you’ll want to search for a BOP that offers flexible commercial coverage. Look for insurance companies that offer an “umbrella coverage” option you can use to extend your insurance coverage should you need to. Umbrella coverage can help you increase the total limitations on payouts if a client sues you. Adjusting coverage levels to fit the unique risks of your industry is one way to customize your coverage — so be sure to search for an insurance company that offers flexible liability limitations and coverages.
Opportunities to Save
Commercial insurance can be expensive, especially if you work in a high-risk industry or if you have a business with a higher number of employees to cover. Look for an insurance company that provides opportunities to save to help you reduce your total insurance liability.
If you’re purchasing multiple types of coverage, you can easily save by buying with an insurance company that offers each insurance type you need. Most insurance companies incentivize customers to keep their policies together by offering bundling discounts when you buy multiple types of insurance, so it can be cost-effective to decide on all of the coverages you’ll need before you search for an insurance provider.
Some insurance companies even provide additional unique discounts to business owners based on how and where they operate. For example, if you have commercial property insurance, you might be able to claim a discount from your insurance company by installing and maintaining a functioning security system. Ask your insurance representatives if there are steps you can take to lower your insurance expenses.
Proactive Customer Service
If you’ve ever filed an insurance claim, you probably already know that the last thing you want to deal with is an unresponsive customer service team. Look for an insurance company that offers multiple methods you can use to contact customer service as well as extended customer service hours. The insurance company you choose should offer around-the-clock claims reporting, which will help you file faster and get your business back up and running with as little downtime as possible.
When it comes to buying insurance, it’s important to remember that pricing can be highly variable between companies. This is part of the reason it’s so important to shop around and compare pricing before you invest in a BOP or other commercial insurance policy. Get a quote from at least three competing insurance companies before you decide where to buy a policy — this will ensure you don’t end up overpaying for your coverage when there are cheaper options offering the same protections.
Can You Buy Other Policies Besides a BOP?
Absolutely. You can bundle your BOP with more specific types of business insurance that might be unique to your industry. For example, if you run a travel agency, you’ll want to supplement your BOP with errors and omissions coverage. Speaking with a local insurance agent can help you understand how to fill in the holes in your commercial coverage, providing a comprehensive insurance package that’s tailor-made to fit your operation.
Common Lines of Commercial Insurance
There are many different lines of insurance you might want to consider for your business. Each type of commercial insurance offers protection for a certain scenario you may not think about until it’s too late. The following are some common lines of commercial insurance that provide coverage for perils and circumstances outside of the more basic issues that are commonly covered under a BOP.
Business interruption: Whether there was a major power outage after a storm or a hacking incident, there are types of damage that might force you to temporarily close your business while you correct them. This is where business interruption insurance comes in handy.
This insurance can help cover expenses you need to continue to pay when your business can’t operate. Some of the things that business interruption can help cover include payroll, commercial rent and costs incurred setting up your business from a temporary location.
Workers’ compensation: While workers’ compensation isn’t as unique as your line of business may be, it can definitely be a necessity. Even if you think there may never be an injury on one of your job sites, it’s better to be safe than sorry.
This insurance offers coverage for pain and suffering lawsuits, punitive damages and any possible medical bills your employees incur during the course of their professional duties. Depending on your location and the number of employees you have, you may be legally required to carry workers’ compensation insurance.
Errors and omission: Otherwise known as professional liability insurance, errors and omission insurance protects a business from lawsuits resulting from a clients claiming you were operating your business in a negligent manner. This coverage can offer protection where traditional business liability insurance does not and is an essential protection for anyone who offers services to customers.
Cyber liability: In today’s technologically advanced world, many businesses fall victim to identity theft and cyber crime. Cyber liability insurance offers coverage in the case of data breaches, during which sensitive data can be leaked. Cyber liability insurance helps cover the costs of notifying customers about the data breach, credit monitoring for customers and legal fees associated with data breaches and cyber crime.
Unique Lines of Business Insurance
In addition to standard lines of commercial insurance that you’ll find with many of the country’s top names in business insurance, some companies offer specialized protections that can be customized to the needs of your operation. Some unique lines of business insurance you might come across while shopping for a policy include the following.
Key person insurance: Some businesses require a top-level executive’s unique skills to remain in operation. Key person insurance is life insurance a company buys on its key personnel to replace them in the event that a major company executive dies or becomes disabled.
Inland marine insurance: If your business transports products, materials or equipment long distance, you may need an inland marine insurance policy. Inland marine insurance protects your shipments from a list of covered perils while they are in transport. As the name implies, this coverage applies no matter whether your goods are being transported by boat, aircraft or another type of commercial vehicle.
Accounts receivable: If you depend on client payments to run your business, you already know that even a single missed invoice can harm your operations. Accounts receivable insurance helps you cover losses when you cannot collect a payment from a client. For example, if an import or export permit is suddenly canceled, your accounts receivable insurance can help you recuperate the lost profits.
Compare Business Insurance
No matter what type of business insurance you need, be sure to spend time comparing policy providers before you sign onto coverage. Benzinga offers insights and reviews on the following business insurance policy providers. You may want to begin your search with a few of the links below.
Frequently Asked Questions
What does a business owner’s policy cover?
A business owner’s policy covers both general liability insurance and commercial property insurance under a single policy. Many business owners choose a BOP in lieu of two separate business insurance policies because they save money on a BOP, as both policies are issued through the same provider.
What is the difference between general liability and a business owner's policy?
General liability insurance is a policy that helps you pay for legal expenses in the event that a customer is injured or damages their things on your property and sues you for damages. A business owner’s policy is a combination insurance coverage that bundles together general liability insurance with commercial property insurance. General liability insurance is a component of a BOP, while a BOP is the name of the overarching policy.
About Sarah Horvath
Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.