Businesses require a lot of insurance, and there are many ways to bundle certain packages. A business owner’s policy is one such package that bundles liability and property coverages into one policy.
A typical business owner’s policy includes:
- Property Coverage: This coverage helps pay for damages or loss that occurs to buildings and items owned by the business.
- General Liability Insurance: This coverage protects the business in the case of bodily injury or property damage that occurs during normal business operations.
- Business Interruption Insurance: If a disaster halts work for an amount of time, business interruption insurance helps cover the income lost during the inoperable period.
What Does a Business Owner’s Policy Not Cover?
A business owner’s policy does not include:
- Professional Liability Insurance: Professional liability differs from general liability. While general liability deals with incidents that occur out of normal work operations, professional liability concerns claims that arise due to negligence or mistakes made on behalf of the company.
- Workers Compensation: Workers compensation helps pay for medical expenses and possible legal fees if an employee is injured on the job. This is not covered beneath general or professional liability. Workers compensation is required for most businesses.
- Commercial Auto Insurance: Commercial auto insurance provides comprehensive, collision, uninsured/underinsured, medical expenses, liability coverage and more for vehicles owned or operated by the company.
A business owner’s policy is not meant to be a comprehensive package to cover everything a business needs. Many industries require specific coverages at varying amounts. The medical industry has different responsibilities and risks compared to a trucking company, for example. Check with your state about business insurance requirements for your company’s industry. There are other coverages that a BOP doesn’t cover, such as Errors and Omissions (E&O) coverage and Directors and Officers (D&O) insurance.
How Much Does a Business Owner’s Policy Cost?
The price of a business owner’s policy varies depending on the industry, size of the business and other factors. You may pay somewhere between $500 and $3,500 a year for a business owner’s policy. On average, businesses pay $1,200 a year for a BOP. A general liability insurance policy for a small business averages between $483 and $2,758 a year. Property insurance costs an average of $742 a year. Depending on the size of your business, it may be more cost effective to purchase a business owner’s policy as opposed to purchasing separate coverages.
Who Qualifies for a Business Owner’s Policy?
Small businesses with 100 or fewer employees usually invest in a business owner’s policy. Industries that aren’t hyperspecialized or have high risk generally qualify for a business owner’s policy. Some industries have unique needs that may need different types or amounts of insurance that don’t fit beneath a BOP. Be sure to speak with an insurance agent about your company’s specific needs.
Do I Need a Business Owner’s Policy for My LLC?
While insurance isn’t always legally required for an LLC, it’s important to protect your assets. You can purchase a business owner’s policy for your LLC to save money on crucial coverages. The cost of a BOP for an LLC averages around $350-$1,600 a year. LLCs should also invest in professional liability, workers compensation and commercial auto insurance.
Do I Need a Business Owner’s Policy?
If you have a business that requires insurance, as most do, you should consider a business owner’s policy. Businesses that require liability and property insurance are those with set locations and carry the risk of lawsuits. This could include anything from restaurants, warehouses, retail stores and more. Speak with a HIS Insurance & Service representative today about saving money and insuring your business.