Business owner’s policy requirements

Businesses in low-risk industries with a small footprint often qualify for a business owner’s policy, which combines general liability insurance with property insurance at a discount. The typical business that is eligible for a BOP:

• Has fewer than 100 employees
• Has a small office, workplace, or other premises
• Makes less than $1 million in annual revenue
• Operates in a low-risk industry
• Needs less than 12 months of business interruption insurance

Part of the property insurance portion of your BOP, business interruption insurance protects against unexpected closure caused by a covered event. For example, if a storm damages a bakery storefront and the repairs take a month, business interruption insurance reimburses the bakery for its lost income.

A BOP protects against common lawsuits, such as damage to customer property or a client slipping in your office. It also protects your own business property. Your policy limits and endorsements determine the extent of your coverage.

A BOP has a cap on policy limits, which is why it is appropriate only for smaller businesses. The limit is the maximum amount that your insurer will pay on a claim or during the policy period.

Your general liability insurance should be able to cover the cost of a potential lawsuit. Your property insurance should have limits that match the value of your business personal property so you can get reimbursed appropriately after a fire or other loss.

To customize your BOP so that it meets your specific needs, you can add endorsements. Contact a licensed Insureon agent who specializes in your industry to discuss endorsements that match your business.

Examples:

A contractor who transports tools and equipment to different job sites might need inland marine insurance to protect property in transit.

A restaurant owner might include a liquor liability endorsement to protect against the actions of intoxicated customers.

A tax preparer who stores sensitive client information on his computer might add cyber liability insurance to protect against a data breach or cyberattack.

A client contract or commercial lease may require a business to obtain the general liability insurance included in a business owner’s policy. Though property insurance isn’t required, it's highly recommended for a business that owns a building or valuable equipment.

A client might require general liability insurance in the terms of a contract, or a landlord might include it as a requirement in a commercial lease.

The general liability insurance portion of a BOP covers:

• Slip-and-fall accidents
• Product liability
• Third-party property damage
• Advertising injuries, such as copyright infringement

This coverage proves you can run your business and pay your bills – even in the midst of a lawsuit.

Property insurance isn't required by law unless you have a loan secured on a piece of commercial real estate. Still, it's an important coverage, even for businesses that run out of the owner's home. Property insurance covers the tools, computers, and buildings owned by a business. This policy is vital for protecting against fires and thefts, preventing one accident from destroying your investment.

You can compare quotes for a business owner’s policy by filling out Insureon’s free online application. After you complete the application, a licensed Insureon agent will get back to you quickly with quotes for policies that fit your business.