If you need insurance coverage for lots of different risks in one package, consider a business owner’s policy (BOP). In this post, we’ll cover how a BOP can help safeguard your small business, and how to customize a policy to fit your particular needs.
A business owner’s policy is business insurance that combines general liability and property insurance in one package. This insurance bundle usually covers bodily injury and property damage for yourself and others. So, not only are your clients protected, but you are as well. Plus, a BOP is often more affordable than purchasing individual policies, which makes it convenient and cost-effective.
For many small business owners, purchasing a general liability (GL) policy by itself is a go-to move. However, general liability insurance doesn’t normally protect you when it comes to your own property.
What does it cover?
A BOP covers four main things.
Bodily injury (operations)
Better known as the “fall and slip” scenario, this coverage includes bodily injuries at a job site. For example, let’s say a delivery person slips on leaking water while they drop off supplies. After they sued your company, a BOP would help to cover the delivery person’s medical bills, loss of wages, and other costs.
Bodily injury (product)
A BOP covers bodily injury claims that arise from using the product from an insured company. One example of this would be a toddler choking on a small object included with the product because no warning labels were on the product’s packaging.
Damage to your property
One of the most common “damage to your business property” claims is an office fire, which not only damages your building but causes loss of business too. A BOP would help to cover your costs in scenarios like this.
Damage to the property of others in your care
Many times, damage to someone else’s property has to do with rented office space. Some companies opt to rent space for their operations rather than buying real estate. In this situation, your business plays the part of a tenant. So, if you cause any damage to your landlord’s property, a BOP would help to cover the loss. But this particular coverage addresses other situations, as well.
Who needs it?
Most small businesses will benefit from a BOP because well-rounded and affordable.
But in particular, you should ask yourself these five questions to decide if BOP is a good fit for you.
Do you need a general liability policy? Most small businesses need a GL policy because they face third-party risk, such as the notorious slip-and-fall accident. But think about who covers you should a loss occur to you specifically, such as a fire at the office.
Do you own property equipment, such as computers, inventory, printers, furniture, etc.? Dealing with damaged or broken equipment could quickly set your business back financially or put it on indefinite standby.
Do you have employees who could potentially act dishonestly? Do you work in an industry with a reputation for employee theft (usually lower-wage jobs)? Or do you have sensitive information that if stolen, would hurt your company?
Do you own the building where you conduct business? If you run the risk of having your own property damage, a BOP will be especially useful for you.
Do you work with a lot of customer or client data? Being responsible for other people’s information always sets the professional stakes a bit higher. If that information is lost or stolen, you’re held accountable for any mess it makes.