A business owners policy (BOP) is a comprehensive way to combine coverages and save money on important business insurance. Not every business qualifies for a business owners policy, however.
In general, only small businesses purchase BOPs. This is because of the coverage limits on a BOP and the restrictions on some of the coverages you may add. Larger businesses should invest in a commercial package policy, which is a more flexible policy with higher limits geared for larger businesses.
Qualifications for a Business Owners Policy
So what constitutes a small business?
The term “small business” applies to different sizes depending on what industry the business is in. On average, a small business may have 100 employees or less. Other aspects that qualify a business for a BOP include:
- Working in a low-risk industry
- Less than $1 million is made in annual revenue
- Having a physical property (office, restaurant, warehouse, etc.) to insure
- Requires 12 months or less in business interruption insurance
How Do You Get a Business Owners Policy?
A business owners policy can be purchased from a private insurer. Be sure to shop around and compare prices in your area. Not all business owners policies are created the same. This type of policy is designed to allow business owners to adjust coverage and limits as needed for their business.
In general, you will need this information to purchase a business owners policy:
- Value of the business’ physical assets to be insured
- Valid driver’s license
- Name and industry of the business
- Number of employees
- Desired coverage
Be sure to speak with an insurance agent about what insurance you would like to add to your business owners policy. While the policy comes with general liability insurance and commercial property insurance, you can add other coverages such as:
- Professional Liability: Professional liability covers professional negligence and incidents that may cause a client to lose money.
- Umbrella Liability: Umbrella liability insurance fills in the gaps leftover by your other liability policies.
- Commercial Auto Insurance: If your company owns or uses vehicles for work purposes, commercial auto insurance can protect them against damages and liability accidents.
Commercial Package Policy vs. Business Owners Policy
The main difference between a CPP and a BOP is the size of businesses and amount of coverage. A CPP covers larger businesses in higher risk industries, allowing for higher limits.
Also Read: Does General Liability Cover Food Poisoning?