Business Owners Policy: Do You Need It?
Are you a new business or small business owner?
Over 627,000 new businesses open in the United States each year. Yet, not all companies have the right business insurance.
Whether you rent or own your workspace, you need a business owners policy. If anything occurs with the property, you can rest easy, knowing it has insurance coverage. However, you might feel discouraged since you do not know much about it.
Fortunately, our guide can help. Continue below to learn more about BOP insurance and whether your business needs it.
What Is a Business Owners Policy?
As a business owner, you likely got offers for a business owners policy insurance or BOP. It is one of the types of insurance that protects you from all property and liability risks. In short, it combines various commercial insurances into one package only.
What Does a BOP Cover?
A business owners policy includes general liability and commercial property insurance. It also includes business income coverage and equipment breakdown. The insurance coverage will depend on your insurance company, but most will cover them.
Commercial liability insurance covers the business for any harm it may cause. For example, an oversight or faulty installation causes injury or property damage. The policy ensures your company compensates the injured person or damaged property.
The commercial property coverage pays for repair, replacement, and stolen business property. It also protects the business space, supplies, equipment, and product inventory.
Do You Need a Business Owners Policy?
After two years, 20% of new businesses fail. The reason for failure is not always mismanagement. Sometimes, it is bankruptcy from damages or legal compensations.
If you own the property, consider getting a BOP. After all, it is the combination of various insurances rolled into one. It is cheaper than getting separate coverages.
However, remember that BOPs do not cover the following:
- Auto insurance
- Professional liability
- Worker’s compensation
- Worker’s health and disability insurance
Consider buying these insurances separately. You may also add them to your insurance as extra coverage.
When Are You Eligible for a BOP?
For businesses to qualify for a BOP, they must possess specific qualities. These include:
- Be in a low-risk industry
- Have fewer than 100 employees
- Earn less than $1 million annually
- Have a small commercial space
Not all business types are eligible for a BOP. Some industries may demand more comprehensive insurance coverage. Freelancers, home business owners, and small business owners should consider getting it.
Extra Coverage Options to Consider
If having a business owners policy is not enough, add more coverage to your insurance. For example, when your business depends on electronic and digital systems, get cyber liability coverage. Meanwhile, if vehicles are central to your business operations, get business auto coverage.
Get a Business Owners Policy Now
As a small business, you should get business owners policy insurance. It is your best and affordable protection against the typical risks of having a business. Use what you learned to guide your decision.
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