Posted on May 17, 2014
With so many choices for commercial insurance coverage, the ability to choose which policy is the best for businesses can become a challenge. The essential coverage needed by most business owners, particularly small business owners, is general liability and commercial property insurance.
Because both of these policies provide needed insurance coverage for small businesses, many companies choose a business owners policy or BOP. The BOP combines two or more insurance policies into one affordable package that can also be customized for specific industries. Many business owners' package policies issued today include three necessary insurances - general liability, property and business interruption coverage.
General liability protects companies from lawsuits resulting from bodily injury or property damage. Property insurance covers the business building, inventory and equipment while business interruption insurance covers loss of income while a business must be temporarily closed due to a covered property claim for damage.
As companies grow, additional types of insurance coverage can be added. Different insurance companies package their business owners' policies with differing policies to make them more attractive to businesses they are targeting. Some will include added features such as coverage for equipment breakdown and income loss. Because these package policies can be customized, business owners can meet with their insurance broker to assess risk and tailor a unique package that perfectly suits their own needs.
In some cases, some insurance cannot be included in business owner policies. These include workers compensation, flood and earthquake insurance. Each of these policies must be purchased separately in order to obtain coverage. Additionally, not all companies can qualify for a business owners' policy. Businesses that require more specialized coverage such as a manufacturing plant or jewelry stores would not benefit from the standard coverage available with a BOP. Large businesses and high risk industries would also not meet BOP criteria for eligibility. Insurers consider business location, finances, building construction, hazards and security when determining whether a company is a good fit for a business owners' package policy.
Companies and industries that do benefit from the BOP include auto repair shops, delis and restaurants, hotels/motels, medical offices, dry cleaners, florists, retail, barbers, beauty salons and shopping centers.