Operating a business comes with a lot of risks. One mistake can put everything that you’ve worked for in jeopardy. Insurance helps you protect your investment if an accident occurs. One of the most efficient ways that business owners protect their investment is through purchasing a BOP.
Business Owners’ Policy Explained
A business owners’ policy allows you to combine property and liability risks that you face into one policy. As a result, you can save money by paying lower premiums for a single policy instead of two or three separate policies. BOPs typically consist of general liability, commercial property, and business income coverage. General liability coverage protects your business if you are facing legal action because someone got injured while visiting your business or if you accidentally cause damage to someone else’s property. It will cover any damages, medical bills, or legal bills resulting from such situations.
Commercial property insurance covers all your equipment and your building’s physical structure against theft, vandalism, and natural disasters. If any of your property is damaged or destroyed, you will be reimbursed for the losses. Business income insurance protects you in emergency situations. You will be compensated if your business shuts down for an extended period of time. You are also covered if you have to relocate your business until your original location is repaired.
Extent of Coverage
BOPs help your business stay afloat. The legal defense and attorney fees can rise quickly. BOPs help reduce the strain on your business so that you can avoid financial disasters. If something important is damaged, BOPs can help your business recover. You will receive funds to pay rent and wages while your business is being rebuilt. BOPs also cover expenses beyond your daily operating costs.
While business owners’ policies are efficient, there are still some areas where your business may be left vulnerable. In such situations, you will need extra coverage to protect your business. Commercial auto insurance is an asset if you use cars to help operate your business. Your business is covered if one of your company vehicles is involved in an accident. Workers’ compensation allows you to protect both your employees and your business. It protects your employees if they are injured in the workplace by covering their medical bills and recovery. You can adjust your BOP to suit the individual needs of your business. Another common endorsement is data breach coverage. Data breach coverage protects your business if computer hackers gain access to sensitive information such as credit card numbers or your customer’s bank accounts.
Benefits of BOP
Keep in mind that you may not qualify for a BOP if you have a large business. BOPs are recommended for companies with few employees that make less than $10 million in sales every year. BOPs are generally appealing to retail store and restaurant owners, manufacturers, consultants, and engineers. If you are operating your business out of an office or apartment, you may qualify for a BOP.
Generally, business income insurance has a unique limit based on the net profits of your business along with the expenses your business would incur to function properly after a disaster. General liability limits are based on the individual losses that your business suffers during the year. Property insurance limits are based on the value of your business’ physical building and equipment.
BOPs do not include a liability deductible. You have the option to choose your property insurance deductible. If you choose a higher deductible, your insurance premium will be lower. The business income insurance section of your policy does not contain a deductible. Still, you have a waiting period of 72 hours once you have experienced a loss before the insurance company covers you.
How Much Does It Cost?
The average price of a BOP is around a few hundred dollars a year. The price of your BOP depends on multiple factors, including the type of business you have, the number of employees you have, and the security features on your property.
A business owner’s policy is an efficient way for you to protect your investment against possible risks. If you have any questions regarding your coverage, contact the experts here at Pittman Insurance Group, LLC, and we will assist you.