5 Common BOP Insurance Myths to Beware Of

There are various insurance policies you should always maintain to protect your company in North Carolina. Out of the multiple coverages available, business owners’ policy (BOP) insurance in NC is the most cost-effective option for small businesses. This policy is highly customizable, and it combines general liability and business property protections.

Many business owners hesitate to get BOP under the impression that they don’t need it for various reasons. Let’s debunk these common misconceptions about BOPs.

  1. Corporate owners are protected by personal liability coverage

    This claim is largely false. If your business is a corporation, you’re only protected from debts and liabilities incurred by the company as a separate corporate entity. For instance, if your corporation defaults on a commercial loan, the lender may not seize the owners’ or director’s personal assets to pay off the debt. Under certain laws, this “corporate veil of protection” can be lifted, exposing owners or management to a personal liability lawsuit. In North Carolina, an injured person could dismantle your corporate protection in court, especially if you own a small business. They could succeed by showing that you wielded so much control over your company that the business couldn’t have had a separate mind of its own. If you end up in this situation without liability insurance, the court can take over your belongings, such as your home, shares, car, or retirement savings.

  2. My business can’t be collected against for my revenues are too little

    Just because a business doesn’t have a lot of money doesn’t mean that its financial liabilities will be written off. Once a judgment to collect is out, the claimant may come after your business or personal assets at any time. This risk is yet another reason to have proper general liability coverage.

  3. In case I die, or I’m incapacitated, my family and business partners will smoothly work things out

    No, many small businesses don’t survive the sudden death or disability of a co-founder. When this happens, some companies plunge into a financial crisis. Many of them may not even have enough money to transfer to the deceased partner’s estate for their shares in the company. When you’re no longer present to assert your authority as a co-founder, you can’t count on your partners to readily reach an amicable agreement with your family. It mostly never works.

  4. My personal auto insurance covers my car for business purposes

    Believing in this myth could leave you exposed to costly auto accident liabilities. Your personal auto insurance usually covers incidents that are not related to business operations. If you use your car for business purposes, you may need to extend your policy to cover this additional usage. You may also need a separate commercial auto insurance policy if your employees use your car for business-related transport. Read your existing policy’s fine print to get a clear picture of the type of commercial activities covered.

  5. BOP insurance is too expensive for my home-based company

    Nothing could be further from the truth. This misconception scares many people from getting adequate protection for their home-based businesses. However, the truth is that BOP insurance is generally a cost-effective option for most small businesses. It allows you to save on coverage costs by bundling multiple policies instead of purchasing them separately.

With these myths debunked, it’s time to get your customized BOP policy in NC if you don’t have one already. Contact us today at Pittman Insurance Group, LLC for any help in creating fine-tuned business property and liability coverage. We’re always ready to evaluate your unique insurance needs.

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