If you are thinking about starting your own business, one of the most important financial decisions you will make is choosing the type of insurance coverage you need. Business owners’ policies (BOPs) offer a comprehensive package that covers many areas of risk management. But not all BOPs are created equal; price is just one factor to consider.
What is a business owners’ policy (BOP)?
A BOP encompasses general liability insurance, commercial property insurance, and business interruption coverage. With BOPs, you’re guaranteed coverage for common business liabilities, like property damage and bodily injuries.
What does BOP coverage include?
Business owner’s policies, or BOPs, are a type of commercial insurance that covers a number of different aspects of your business. While each individual policy varies from provider to provider, here’s what you can expect:
General liability: This insures against any claims related to bodily injury or property damage that occurs on your premises or during operations; it includes medical payments and legal defense costs in the event someone sues you after an accident on your property.
Commercial property: This insures against physical damage to the building(s) where your business operates—such as fire or theft—as well as the liability associated with those buildings (if someone is injured while on their premises). It also protects against any loss of income resulting from these situations.
Business interruption coverage: This pays out if there’s an interruption in daily operations because of any covered event (such as a fire) that prevents employees from accessing their place of employment.
Getting the right amount of coverage
A BOP is a great way to get multiple types of coverage in one package, but you need to be sure you get the right amount of liability insurance. Insurance companies offer different types of policies with various amounts of general liability coverage. If your business is a partnership or corporation, it will require different levels of coverage than an individual business or a small business with one owner.
BOPs are not the same as worker’s compensation, which is required under state law if you have employees on your payroll. BOPs cover many kinds of legal liability issues, including property damage and bodily injury. The cost varies depending on the type of insurance and the amount of risk. If you have questions about what is covered by a BOP, contact a representative from your carrier directly.
A BOP can be a great way to get started in the insurance world, but it’s not right for every business. If you decide that a BOP is not right for your business, you can create an entirely separate policy with general liability insurance and commercial property insurance.
An insurance policy can protect both you and your business in the event of losses. There are a number of factors to consider when looking into an insurance policy, but if your small business falls into one of the categories mentioned above, there’s a good chance you should look into business owners’ policy insurance.