Business insurance provides financial protection against the risks faced by small businesses. It protects against liability claims, covers property damage or loss and can even reimburse lost income. Most businesses need at least commercial property and general liability insurance, while others may require workers’ compensation or commercial auto coverage.
Business Owner’s Policy
A business owner’s policy (BOP) is a bundle of several insurance products designed by a contractor insurance to protect small businesses against many of today’s most common risks. It combines business interruption, property and general liability insurance in one policy. While BOPs were designed with small businesses in mind, they can be customized to meet the needs of larger businesses as well. Insurance providers may add additional coverages called endorsements to BOPs such as coverage for data breach, utility services off-premises and more.
The property portion of a BOP will cover damage to inventory, furniture, and business equipment. It may also cover the cost of temporary relocation expenses for a small business following a disaster. The liability portion of the BOP covers claims by clients or customers for damages caused by the business. It includes coverage for property damage or injuries caused by the products or services of the business, as well the legal costs associated with defending such claims.
BOPs are usually less expensive than purchasing separate commercial property and liabilities policies. They simplify coverage management because they provide a single point-of-contact for all questions regarding your business’s policy.
However, it’s important to assess your individual risk profile and coverage needs before deciding on a BOP. For example, a software company probably won’t need vehicle insurance, but a home service business with a fleet of vans might. You can also include other types insurance in your BOP, such as flood insurance, crime insurance or workers’ compensation.
General Liability
A lot of businesses require general liability insurance (also known as commercial liability) because they face many risks when running a business. A lawsuit without it could bankrupt your business. The Hartford reports that the average cost of a small-business lawsuit is more than $100 an hour, and the legal fees alone may be enough to put your business out of business. In addition, your clients might refuse to do business with you if you don’t have the required coverage.
While it doesn’t cover damages to your own business property, a general liability policy can pay for third-party claims resulting from accidents or mistakes that occur during your regular business operations. This includes claims for bodily injuries, property damage, advertising injuries, and copyright violations. It does not cover work-related injuries to employees, which should be covered by workers’ compensation insurance. It does not cover mistakes made by professionals, which should be covered under professional liability insurance.
A commercial general insurance policy will usually have a per-occurrence cap that will determine how much the insurer pays out for each incident. You can choose a limit that’s right for your business, but the higher the limits, the more expensive the premium will be.
There are several ways to get a general liability insurance policy for your company. Some insurers offer this as a separate policy, while others bundle the policy with a business owner’s policy. Some policies may also provide other forms of coverage, such as medical payments and property damage. Talk to a broker for help if you are not sure what kind of coverage your company needs. They can help find the right options for your specific business. They can save you money by bundling insurance policies.
Business Interruption Insurance
Business interruption insurance helps cover your financial losses when your business is forced to shut down because of a covered peril. Business interruption insurance is often included in business owners policies (BOP), although it can be purchased separately. Business interruption coverage generally covers the cost of lost revenue during a shutdown and other operating expenses. It is usually limited by the duration of the coverage and the amount covered. It may also include a deductible.
Most business interruption policies only cover losses incurred in a restoration period triggered by damage to the insured property caused by an insured peril. In some cases, civil authority coverage may be available. This coverage provides coverage for losses caused by government-mandated shut downs or other limitations. However, the coverage is only valid for the duration of the order, and the amount paid out is subject to strict limits and deductibles.
As a result, it is critical that risk professionals familiarize themselves with the specific wording of their policies and their potential exposures. This will help them to better understand how they are protected in the event of a disruption and what other types of insurance, such as general liability or commercial property insurance, may be available to them to provide coverage for additional losses that they are not covered for under their business interruption policy. This will help them make better purchasing decisions in future.
Business Auto Insurance
Business auto insurance, or commercial auto insurance, covers cars, trucks and other vehicles your company owns, leases or rents. This includes coverage for the vehicles that your employees use for company business. It also covers liability for injuries caused by leased cars or rental cars, and damage to non owned autos used at work.
Some states require that businesses have a certain level of auto liability insurance. Your business might also want to consider uninsured/underinsured motorist coverage and medical payments coverage, which pay for injuries and property damage resulting from an accident, regardless of who is at fault. Physical damage coverage is optional. It pays for the repair or replacement of covered vehicles and trucks.
The best small business insurers offer additional coverages in addition to the basic policy. This helps you meet your needs. Chubb offers a policy for business owners that includes extra expense coverage and business interruption insurance. It also offers a simple online shopping experience and a free automated coverage companion that helps you keep track of your policies, claims and documents. It offers a variety of policies for business owner, including employment practices liability insurance and criminal crime insurance.
The best business auto insurers offer a large selection of policies as well as easy ways to purchase them. Some companies offer quotes and a convenient purchase process online, while others have you connect with an agent to finalize your purchase. Many of these companies sell specialized policies to specialized industries, and can answer specific questions about risks. Hiscox, for example, offers professional liability insurance to law firms and financial service providers. They can also provide an estimate on the cost of your policy based upon your industry.
