THURSDAY, JULY 29, 2021
You have to keep your business’s financial future secure. That means buying appropriate levels of commercial insurance. But coverage comes at a price, and you don’t want to sacrifice protection just to be able to pay less for your policies. How do you solve a problem faced by many business owners?
One of the best places to start is by buying a business owners protection policy, or BOP. This form of coverage that has many cost benefits for small business owners.
What is a BOP?
What if you could get several of the most important forms of commercial insurance all in the same policy? That is what a BOP is for, and its benefits can prove very satisfying to many small businesses.
By having crucial coverage in one package, you won’t have to carry multiple policies. That’s obvious. Furthermore, because these elements of coverage all work together, the BOP will likely guarantee that they all have cohesion among themselves. This might save you a lot of hassles when trying to manage different elements of your protection.
Getting a BOP will likely also come with cost benefits. Instead of having to pay multiple premiums, you can pay one cost. The same often goes for deductibles and other policy costs as well. Instead of multiple costs, you’ll only pay only one. This will often reduce the cost burden on your own checkbook.
However, keep in mind that every policy is different. Talk to your agent about the specific costs you will incur. They’ll help you target your coverage to your benefit.
What coverage comes with a BOP?
Business owners packages vary. However, they usually contain several core elements of coverage. Each of these usually prove crucial, not to mention mandatory, for all businesses.
Property coverage protects the building from which you operate. It can also cover belongings like furnishings, machinery and equipment and other items. At times, you might need special elements added to provide coverage for specialty equipment.
General liability insurance extends to harm the business might cause to third parties. For example, if someone slips and falls in your restroom, they might sue you for medical bills, lost income and pain and suffering. Coverage might help you settle with them for their losses, as well as cover legal costs.
Business interruption coverage comes into play during the cleanup process. Let’s say a severe storm damages your store. It might be unsafe to operate while the damage exists. Nevertheless, closing to make repairs might mean a loss of income. Interruption protection can help you pay employees, vendor and outstanding bills during the repair process, even if you can’t operate to make money. This protection might also cover temporary relocation costs.
Some policies might contain cyber liability or products liability coverage. These policies can protect the company in case data losses or malfunctioning products cause losses to clients. Ask your agent if you can include them.
Setting Up Your Policy
You’ll have to tailor your BOP to meet the specifications of your business. Your insurance agent can work with you to make the policy more effectively to meet your needs.
Almost all insurance policies come with coverage limits. This is the maximum amount of compensation you can receive when you file a damage claim. For example, if you have $100,000 in property damage coverage, you can receive at most $100,000. Some policies might place extra limits on certain items as well.
Ask your agent to include in the policy the total value of your business and assets, as closely as possible. Getting the appropriate value helps to keep your own bank account secure should you have to make a claim.
Use a BOP as a Starting Point
As great as they sound, BOPs don’t cover everything. That’s why you likely need to add other commercial coverage to fully protect the business.
Some BOPs will exclude certain property. Make sure items like outdoor equipment, decorations or certain machinery have coverage. You might need specialized or additional coverage for these items.
BOPs do not contain coverage for company vehicles. You will need commercial auto insurance for these items.
Coverage usually won’t include E&O protection. This coverage protects you in case you make professional mistakes. Therefore, don’t go without it.
Other coverage not included in BOPs includes workers’ compensation, health and disability insurance, and other employee benefits. You often have to carry this protection, so make sure you get these policies as well.
For reasons like these, it’s often a good idea to use a BOP only as a starting point for commercial insurance. Make sure you build effective coverage. This might mean adding additional coverage alongside your BOP.
Ask your insurance agent to go over every optional type of coverage with you, and see if it is to your benefit. Still, let your BOP act as a secure core for your business protection. Contact us to get started today.
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