Protection of your business against unexpected circumstances is an integral component of running any organization, and having sufficient insurance coverage in place is the ideal way to achieve this.
Individual small businesses face different risks and liabilities; as such, no single policy can meet all their needs.
Business Owner’s Policy (BOP)
A Business Owner’s Policy (BOP) combines property and liability coverage into one package policy, saving businesses time and money by eliminating individual policies for each type of risk. BOPs typically serve small and midsized businesses who meet eligibility criteria.
A BOP provides commercial property insurance that safeguards your physical location, equipment, inventory and more against fire, theft and other risks that could damage or lose their value due to fire, theft and other perils. Furthermore, this coverage also offers liability protection if someone gets hurt on your premises; its cost varies based on factors like value of the properties covered as well as geographic location, age and claims history of your business.
Property and general liability portions of a BOP may be supplemented with additional optional coverage components, such as data breach insurance to cover costs associated with cybersecurity incidents or business interruption insurance to recover any income lost should disaster strike your business temporarily shut down. It might also be worthwhile considering workers’ compensation insurance for your staff as well as errors and omissions cover for professionals like lawyers and architects, errors and omissions insurance for any professionals engaged in legal practices, errors and omissions coverage for professionals such as architects or lawyers and commercial auto coverage should vehicles be involved in business ventures as you use vehicles as part of doing business activities.
General Liability
Companies need various insurance policies in place to withstand the financial impact of accidents and disasters, with General Liability insurance serving as one such solution. This form of business insurance protects against third-party bodily injuries and property damages as well as reputational harm due to libel, slander and copyright infringement claims.
Commercial General Liability or CGL insurance policies are one of the most frequently purchased policies by small businesses. Also referred to as slip and fall coverage, CGL policies cover legal defense costs as well as any damages sustained from accidents that happen on company property.
Some CGL policies provide coverage for incidents that cause reputational harm such as libel and slander; others offer an endorsement specifically addressing copyright infringement claims. Each year’s aggregate limit usually only allows payout for three costly claims before any further losses won’t be covered by your policy.
Product Liability
Though no business can eliminate all risks, many can mitigate many by purchasing insurance policies to cover them in case of an unforeseen incident. With so many policies available to choose from, however, selecting the appropriate one can often prove daunting.
Commercial Property Insurance policies protect the physical assets of a business from damage and theft. For instance, should your office building be damaged by fire or stolen computer equipment is stolen, this policy will reimburse for repairs or lost income as required by any business with assets worth protecting. It should therefore be considered essential.
General liability policies cover three primary areas: premises, products and completed operations. Premises liability covers accidents that take place on your company premises – for instance when customers slip and fall over uneven flooring – while product liability applies to businesses that produce, sell, handle or distribute goods and services which could include claims of injuries or damage caused by them. When pricing this form of coverage, insurers take several factors into consideration, including size of company, revenue generated and industry risks.
Commercial Auto Insurance
Commercial auto insurance protects both your business and drivers when accidents occur while operating work-related vehicles. Similar to personal auto policies, but with higher limit options and covering employees more comprehensively. A commercial auto policy should be an absolute must for any organization using cars or trucks as part of its operations.
Based on your business type, other types of insurance policies may be necessary. If you sell products that could cause injury to customers, such as product liability insurance. Errors and omissions (E&O) coverage is often an excellent solution for professionals such as physicians, attorneys and accountants who may face legal claims from customers for mistakes they made in providing service to clients.
Any business with physical assets should purchase property insurance to cover the costs associated with repairs or replacement in case they are lost due to fire, storms, theft and other common sources. Owners who operate from their own home should consider purchasing home-based business policies that go beyond standard homeowner policies to offer more comprehensive protection for business equipment and inventory.
Business Interruption Insurance
Business interruption insurance protects you against financial losses caused by property damage to your business and covers loss of income as a result. It’s typically included as part of an owner’s policy as commercial property coverage.
An interruption policy covers additional expenses associated with running a business during periods of disruption, such as renting temporary space to temporarily relocate and advertising costs related to gaining new customers. It may also protect rental income lost from damaged locations while they’re being repaired, as well as lost rental income caused by damaged locations being renovated.
Business interruption insurance comes in various forms. One type of policy calculates its sum insured using gross profit with a set indemnity period – this type is particularly suited for service-led companies that don’t rely on variable costs tied directly to turnover for revenue generation.
Some policies provide contingent business interruption (CBI) coverage to protect your company against interruptions caused by third-party disruptions like fire halting equipment deliveries from suppliers. Other policies extend BI coverage further with civil authority coverage that covers closures or restrictions imposed by governments – this type of insurance may not be required, but could prove advantageous for certain types of businesses such as health clubs or restaurants.
