5 Things Your Business Owners Policy is Missing
Posted on Jun 27, 2022
If you own a small enterprise and looking for an insurance policy for your business, a business owner’s policy, or BOP, can be a great solution. Below we go over what a business owners policy is, what it covers, its advantages, and things your BOP might be missing.
What is a Business Owners Policy Insurance?
Instead of buying separate insurance policies, investing in a comprehensive business owners policy can cover your business property and liabilities under one insurance policy.
A BOP coverage can be customized to include coverages most suited to your type of business. Because of its flexibility, BOP is a great insurance option for small and medium-sized enterprises.
You can invest in a BOP insurance policy if:
- You own a small or mid-sized business.
- You rent or own a physical workspace that requires general liability insurance.
- You have assets like furniture, cash inventory, or use digital assets and customer data that need protection from theft and damage.
- You need protection from potential lawsuits from employees and customers.
Advantages of BOP Insurance
A BOP provides a simplified broad-based coverage that combines property and general insurance needs, protecting your business and assets. The policy is a convenient insurance option for business owners as they can add coverages catering to their unique needs using BOP insurance endorsements.
What is covered under BOP insurance?
Your business insurance policy combines business property insurance and business liability insurance and includes:
Business property insurance:
The business property insurance covers the business property you own, like buildings, equipment, furniture and fixtures, digital assets, valuable documents, records, etc. They come in two forms, standard and special, to provide comprehensive coverage.
Business Income Insurance:
Business income insurance replaces income lost from unexpected events like fire, flood, or earthquake that can disrupt your business as long as the cause of loss is covered. The policy also covers employee benefits like payroll and other payments.
General Liability Insurance:
General liability insurance covers legal expenses from damage to any person or property. It protects your business’s legal responsibility arising from harm caused to others because of wrongful actions of your employees, resulting in loss or injury to another person or property.
What are BOP Insurance Endorsements?
You can modify your business owner’s policy insurance by adding, excluding, or deleting certain coverages. BOP insurance endorsements can help you customize your BOP insurance policy without buying separate insurance policies for your business needs.
5 Things Your Business Owner’s Policy is Missing
Your business owner’s policy does not cover certain liabilities like worker’s compensation, professional liability, data breach, cyber liability, etc., which can be included in your policy in the form of BOP insurance endorsements.
Here are five things your business owner’s policy is missing that you can include in your BOP policy using endorsements.
1. Cyber Liability Insurance or Data Breach Coverage
If you are a business owner and use technology to run your business, you can face business risks arising from cyber attacks like hacking and data breaches. To protect against such threats, you can add cyber liability insurance to your BOP.
Cyber insurance can protect your business from hackers who target personally identifiable information (PIL) or personal health information (PHI) from your business computer, preventing a data breach.
The coverage can be helpful to you if you:
- Work in an industry that has rules about protecting customer information like healthcare and finance.
- You collect, store and deal with PIL and PHI that can cause legal issues.
- Your business computers are susceptible to cyber attacks from viruses.
2. Professional Liability and Employment Practices Liability Insurance
You can buy professional liability insurance to protect you and your business from any loss because of mistakes in offering professional services to clients, causing financial loss.
Professional liability insurance typically covers:
- Misrepresentation
- Negligence
- Wrongful advice
- A personal injury like libel and slander
Employment practices liability insurance protects you from claims by your employees of wrongful termination, wage and hour claims, harassment and discrimination claims, and other wrongful acts concerning employment.
Adding these coverages to your BOP can save you from expensive litigation costs in the future
3. Commercial Auto Insurance
Adding commercial auto insurance to your BOP can cover expenses relating to auto accidents when you or your employees use company-owned vehicles for business.
Some common types of commercial auto insurance that are available to business owners are:
- Comprehensive coverage – pays for car damage from fire and theft.
- Bodily injury liability coverage – covers other drivers’ medical expenses in accidents.
- Collision coverage – pays to repair your business vehicle in the event of a collision.
4. Workman’s Compensation Insurance
If you have employees in your business, you need to add workers compensation insurance to your BOP. The policy covers employees and their families when medical expenses arise from work-related accidents, illness, and even death.
5. Commercial Crime Insurance
The policy offers protection from criminal activities like employee theft and forgery. Adding the insurance coverage to your BOP would protect your business from losses arising from such illegal activities.
Some coverages available under the commercial crime insurance policy are:
- Computer fraud coverage
- Employee theft coverage
- Forgery coverage
