No one business owners policy is the same because they are geared to cover specific businesses and their insurance needs.
At its most basic, a business owners policy combines two types of insurance: general liability and commercial property.
- General liability insurance covers expenses related to third party bodily injury and property damage that may occur on the business property. For example, if a guest falls and injures their arm in your store, this insurance will help cover the victim’s medical expenses related to the injury while simultaneously protecting the business against lawsuits.
- Commercial property insurance covers the physical property owned by the business in case of fire, wind, lightning, hail, smoke, theft, vandalism and more.
These policies are flexible, however. A business owners policy is designed to combine coverages in a way that makes business insurance easier and more affordable for the business owner. This means that you can add different coverages and adjust coverage limits as you need.
Additional Coverage Available for a BOP
There are some insurance coverages that are frequently added to a business owners policy. These include:
- Professional Liability: Where general liability covers non-professional negligence, professional liability covers incidents of professional negligence that may cause a client to lose money. This is especially useful for businesses that employ specialists in certain industries. In the medical field, this is known as medical malpractice insurance.
- Cyber Liability: Cyber liability provides compensation for expenses related to electronically stored information that is lost, damaged or breach in a cyber-attack, data breach and more.
- Commercial Auto Insurance: Commercial auto insurance provides coverage for vehicles owned or used by the business for work purposes. Your personal auto insurance policy is unlikely to cover vehicles that are owned by the business. This insurance can provide the same protections for commercial vehicles.
- Directors and Officers Insurance: Directors and officers insurance covers key employees and the business in case of a lawsuit regarding the employee’s actions while working for the business.
- Employment Practices Liability: Employment practices liability insurance (EPLI) can often be added to a directors and officers insurance policy or purchased as part of a BOP. This insurance covers the business in case of a lawsuit regarding the business’ employment practices, such as wrongful firing or hiring.
- Flood Coverage: Many property insurance policies exclude floods. If you operate in an area with a high rate of flooding, you may want to purchase additional coverage to cover your business’ assets.