For Small Business Insurance, Look to a Business Owners Policy or BOP

Few if any insurance options beat a business owners policy or simply BOP for the small or home business. What is BOP? The business owner’s policy pulls together a combination of needed coverages in one package for major property and liability insurance risks. The BOP is a great fit for the very small to medium size business with less than 100 employees and an annual dollar volume of $5 million.

The great thing about a business owners policy is that you can buy a number of coverages together in one package and save money on the total rather than buying separate policies such as commercial business liability, small business general liability insurance or various other liability insurance for business. Besides the coverages in a typical policy, you can buy specific options that you might need for your specific business.

For example, businesses involving book publishing, retail strip mall ownership, auto repair, florist, medical office, dry cleaning, funeral home or barber shop might all start out with the same business owners policy and then add special options. While the book publisher and strip mall owner may need many similar coverages, the book publisher might want to get an option to protect the company from lawsuits involving copyright infringement while the strip mall owner may need insurance to protect him from lawsuits that may ensue when he has to evict a tenant from a retail space who is not paying rent.

In looking at the BOP policies of various insurance companies, here is one offering that is fairly typical. There is a lot of good coverage here:

• Property claims
• Equipment breakdown
• Income loss
• Professional liability claims
• Products and completed operations claims
• Fire legal liability claims
• Premises liability claims

Another big insurance company we looked at covers business liability, business and business personal property (BPP), equipment breakdown, business income interruption, fire legal liability and money and securities coverage in its standard policy. The money and securities coverage under this particular plan protects the business from losses of money on the premises up to $10,000. This policy might fit well with a rather substantial retailer who brings in $10,000 or less at its location daily.

Another big company offers coverage for bodily injury and property damage. This particular policy also covers personal and advertising injury, which includes libel, slander, defamatory or disparaging material or publication, infringement of the privacy or copyrights of others in its advertising, false arrest, wrongful entry or eviction or other invasion of the right of privacy occupancy.

Naturally, these policies can vary with location, because the states set the rules regarding insurance. So San Diego business insurance might look somewhat different than New Jersey (NJ) business insurance.

These small business insurance plans can typically be had for a few hundred dollars a year. If you were to go into the market and purchase each of these separately, you would be paying in the thousands of dollars. What’s the difference in coverage between the above mentioned BOPs and buying each of these policies separately? The separate policies are really designed for the much larger company. If you have a small home-based business and tried to purchase an income loss policy, for example, it might cost you a bundle because most of those policies are designed for the larger company with a big income. Your company, although prosperous, might have relatively smaller income in comparison to that other company.

Check out a BOP policy with your independent insurance agent. While you are at it, you need to look for umbrella coverage to also cover the unknowns that can happen in business.

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