Everything You Need to Know About Business Owners Policy Insurance

December 15, 2022 | All Categories

Companies must have adequate business insurance to protect them financially when unexpected incidents occur. A crucial component of an effective business insurance strategy is what’s called business owners insurance—also referred to as a business owners policy or BOP. Having a BOP in place can help shield your company from the costs associated with many types of business risks.

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What is Business Owners Policy Insurance?

Business owners policy insurance is also called property & liability insurance. That’s because, in addition to covering costs associated with liability, they can pay for certain business property repairs or losses and loss of business income as a result of a covered event. Almost every business faces these risks, so insurers often conveniently combine the coverages into one policy.

Who Needs a Business Owners Policy?

Nearly every type of company can benefit from a business owners policy. In particular, you may need a BOP if you:

  • Have a physical location. Most, but not all, companies have an office, warehouse, or other space where incidents can occur.
  • Have assets that could be damaged or stolen. The temporary or permanent loss of any type of business property can affect your operations.
  • Could be sued. Few businesses are immune from this risk. Unfortunately, people who are injured at your business location or whose property you damage may resort to litigation rather than working with you to resolve the issue.

So, you can see why many business owners purchase and maintain business owners policy insurance coverage. Without it, you open your business to taking on large financial burdens associated with liability or physical property losses. 

We provide business owners policies for a long list of industries and business types, including:

  • Accounting firms
  • Auto service providers
  • Bakeries
  • Cleaning and janitorial services
  • Consultants
  • Construction companies and contractors
  • Electricians
  • IT companies
  • Landscaping companies
  • Liquor stores
  • Medical offices
  • Restaurants
  • Transportation companies
  • And many others

What are the Advantages of a Business Owners Policy?

The types of protection provided by a business owners policy can be found in other individual policies. However, combining them in a BOP is helpful in a few ways. First, you get broad coverage in one policy—from liability issues to property-related incidents. Second, managing and using your policy is easier, including that you can report claims for more concerns on one policy. It’s also easy to add coverages like employment practices liability, employee benefits liability, liability coverage for use of non-owned vehicles, etc.

And finally, you may be able to save money since combined coverage is often more cost-effective than individual policies. Consequently, if your business faces both general liability and business-property-related risks, it’s a good idea to talk with a biBERK licensed insurance expert. They can help you decide whether a BOP is right for your company.

What’s Covered Under a Business Owners Policy?

A business owners policy essentially has two components: general liability protection and business property protection. The general liability aspect covers:

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    Customer property damage. If you or your employee damages a customer’s property—you damage a wall while working in their home, for example—your BOP may help pay for repairs.
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    Non-employee bodily injury. If someone other than your employee suffers an injury on your property, your business owners policy can help with medical expenses plus legal expenses and damages. For instance, so-called slip-and-fall accidents are common.
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    Product liability. If an item you developed or sold harms people or property, this coverage can help pay legal expenses associated with product liability lawsuits and medical expenses if an injury occurs.
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    Slander, libel, and copyright infringement. Your BOP helps protect you against expenses from lawsuits over what are referred to as “advertising injuries.” This includes things like disparaging a competitor in your advertisements, stealing an advertising idea, etc.

The business property aspect of a BOP covers:

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    Your building or leased space. Protecting a building you own is essential. It’s also common for a landlord to require that you have this type of coverage before you sign a lease.
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    Building contents.  Property insurance can cover your inventory, equipment, and tools. It can also cover other people’s property in your building that is damaged by an employee, a natural disaster, inclement weather, etc.
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    Business income. If covered property damage disrupts your business, your BOP can cover expenses related to resuming your business. That includes covering net income, payroll costs, and even temporary business relocation. This aspect of the coverage is sometimes called “business interruption insurance.”

Coverage for a wide variety of risks makes a BOP a great fit for many businesses.

What Doesn’t a Business Owners Policy Cover?

A business owners policy, covers property, business income, and general liability. Plus, you can add several other coverages. However, it doesn't cover things like employee injuries, professional errors (sometimes called errors and omissions coverage), or business-owned vehicles.

If you have questions about whether a BOP covers a specific risk, be sure to ask us. If it’s not addressed by a business owners policy, we can tell you what type of insurance you need to protect your business from that risk.

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Additional Coverages for Business Owners Policies

Insurance policies often allow you to add what are called endorsements. That’s true for business owners policies from biBERK. Endorsements typically enhance a policy in some way. For example, our BOPs can include:

  • Industry endorsements. Depending on the type of work you do, there are specific risks that arise as part of conducting business. For example, a restaurant industry endorsement might cover food spoilage. A retail store endorsement might address expenses from having to withdraw merchandise. A lodging (hotel or motel) endorsement might increase your BOPs coverage for fences and signs.
  • Risk-specific endorsements. Some businesses have inherent risks beyond those typically covered in a business owners insurance policy. There are dozens of risk-specific endorsements that can add an extra layer of protection when needed. If your business faces unique risks, you should discuss them with one of our licensed insurance experts.
  • Higher coverage limits. If you want to enhance your financial protection, you can generally increase the standard coverage limits on your business owners policy.

This type of flexibility is extremely advantageous, especially for small businesses that want to get adequate coverage but only the coverage they need.

Some of the specific endorsements we offer with our BOPs are:

Cyber Liability

This add-on insurance protects your business in case of an incident like a data breach involving private customer, employee, or client information. It can also provide coverage for regulatory action defense if a government agency requires you to appear in court.

Hired and Non-owned Auto Liability

If you need protection when you or an employee of your business is driving a rented, leased, hired, or borrowed vehicle for business purposes, this endorsement can provide it. A common example is an employee who makes deliveries using their own car. Adding this endorsement to a BOP means you don’t need a separate commercial auto policy for this purpose.

Employment-related Practices Liability

This add-on protects your business in case of a claim or lawsuit related to inappropriate workplace behavior (e.g., harassment, wrongful termination, discrimination, etc.).

Employee Benefits Liability

This policy enhancement provides coverage in the event of errors or omissions in how you administer your employee benefits program. For example, it can protect you if you fail to add an employee to your medical insurance and the plan later denies the person coverage.

Contractors Installation, Tools & Equipment

This endorsement covers your company’s property, tools, equipment, etc., while at a job site, in transit, temporarily in storage, or during installation.

Liquor Liability

Liability your business incurs related to the selling, serving, or furnishing of alcoholic beverages can be covered by this endorsement. For example, it can provide coverage if your business is found liable because you served a minor or someone visibly intoxicated who subsequently gets into an automobile accident. It can be crucial to any company that sells alcohol, including restaurants, convenience stores, and liquor stores.

Equipment Breakdown/Boiler and Machinery

This add-on covers the unexpected breakdown of electrical systems, air conditioning and refrigeration systems, mechanical equipment, boilers and pressure vessels, and computers. (Note: The loss must be the result of something like a power surge or electrical short. Coverage isn’t provided for equipment that simply stops working.) This coverage can pay for equipment repair or replacement, lost income while equipment is inoperable, costs related to the time and labor required to make repairs, and the cost of food spoilage.

How Much is Business Owners Insurance

biBERK business owners policies are very affordable. They start at about $500 annually, and most businesses pay less than $2,000. When you consider that even a minor incident can cost tens of thousands of dollars or more to resolve, that rate feels like a bargain.

To determine what you’ll pay for a BOP, you can get an instant, self-service quote online. Your rate is determined based on several factors, including:

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    The type of work you do
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    Your annual revenue
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    Your industry
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    How long you’ve been in business
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    Your company’s claims history
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    The types and limits of the property coverage you select

And, of course, there are steps you can take to minimize your insurance cost. For instance, simply by purchasing insurance from biBERK, you can save up to 20% over other providers. That’s because our direct-to-you business model cuts out brokers and others, and we pass the savings on to you.

You should also take action to identify and actively manage your business risks. That may involve properly maintaining your work environment, promptly addressing hazards, etc.

As for billing fees, you can avoid them by signing up for automatic payments when you purchase your policy. That way, you don’t have to think about it and will never miss a payment.

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How to Purchase Business Owners Insurance

One of the best things about buying a business owners insurance policy from biBERK is that it’s a simple, straightforward process. As noted above, you can get a quote online anytime it’s convenient—while you have your first cup of coffee in the morning, at lunch, between meetings, or in the evening when your day finally slows down.

Then, when you’re ready to make a purchase, you can also do that online. Your policy is typically active the next day, which means that incidents that occur after that and meet your policy parameters can be covered. Any properly insured business owners will tell you that there’s a tremendous sense of relief that comes from knowing your business is protected from unexpected financial losses.

Going forward, it's also simple to manage your policy or report a claim. We’ve structured our processes to be highly streamlined and efficient because we know you’ve got many demands on your time.

Other Vital Small Business Insurance Policies

A biBERK business owners policy provides broad coverage. However, it’s important to recognize that your business may need other policies as part of your overall business insurance strategy.

In addition to BOPs, we offer:

  1. Workers’ compensation insurance to cover employee injuries
  2. Errors & omissions insurance to cover alleged or actual mistakes you make in provide professional advice or services
  3. General liability insurance to protect you from lawsuits resulting from various actions
  4. Commercial auto insurance to cover liability related to operating company-owned or leased vehicles
  5. Cyber insurance to protect you from costs related to data breaches resulting in fraud
  6. Umbrella insurance to cover the difference between an expense and the a liability policy’s limit

All of these policies are available through the same, convenient process—from the online quote to the purchase and nearly immediate coverage to online claim reporting and policy management.

Check out these important insurance policies for business owners and contact us if you have questions about which are right for your business. Once your coverage is in effect, you can turn your attention back to running your business. And you can do so with confidence, knowing that biBERK will be here for you should the unexpected occur.