Small Business Insurance

Does your small business need a business owner’s policy?

If your business owns or leases an office, hires employees, or has equipment, then it’s important to protect those assets with a business owner’s policy.

A basic BOP includes general liability and commercial property insurance coverages. They are often referred to as an essential go-to package for the average small business. In most cases, a BOP is not required to operate, however, it protects your business from uncertainty due to unexpected financial loss.

Some of the most common insurance claims fall under business owner’s policies and maintaining this coverage is essential where the cost of enduring one large claim could threaten the future existence of a small business.

What businesses are eligible for a business owner’s policy?

Most small businesses in low-risk industries will qualify. A BOP tends to offer organizations more flexibility at better premiums than trying to find one-off policies through carriers.

The typical business that qualifies for a business owner’s policy:

• Employs under 100 employees
• Operates out of a workspace (office, warehouse, etc.)
• Earns less than $1 million in annual revenue
• Is in a low-risk industry (retail, office-based, contractors, tech, etc.)
• Needs less than 12-months of business interruption insurance

If your company does not meet the criteria, you might need to purchase general liability and commercial property insurance policies separately.

What does a business owner’s policy cover?

There are primarily two types of coverages included in a business owner’s policy:

1. General liability insurance
2. Commercial property insurance, also known as business property insurance

Each carrier has its own unique twist on BOP. Sometimes carriers will include business interruption insurance, cyber insurance, or another add-on depending on the business’ industry. That makes it even more important to reach out to one of our licensed agents to help navigate which carrier is the best fit for your coverage requirements.

General liability insurance covers third-party accidents resulting from your business operations, such as injury, property damage, advertising injury, and legal costs to defend against lawsuits. For example, if an employee incorrectly replaces a faucet and water leakage damages a customer’s property, general liability coverage will help pay for the expense to replace the customer’s water-damaged property.

This is one of the most common types of business insurance that most companies should have. It’s very rare that a business won’t interact with customers, which means there’s a chance for accidents and claims to occur.

Commercial property insurance covers the cost to repair or replace business property that is stolen, damaged, or permanently destroyed, within the terms and conditions of the policy. This includes owned commercial spaces, equipment, inventory, electronic data, and personal effects. For example, if there’s a leak in your office building over the weekend and it damages laptops beyond repair, commercial property insurance will compensate your business for the property damage.

Part of commercial property insurance is often business interruption insurance, and this protects your business against unexpected closures that result in loss of revenue. It helps cover events like a pipe bursting that forces you to shut down while repairs are made.

Working locations vary, but most businesses operate from some commercial location. This makes commercial property insurance a must for many small businesses.

Business owner’s policies are meant to be flexible. Depending on which insurance carrier you decide to use, a BOP bundles different insurance offerings for a customized solution that fits your operational requirements. Some common add-ons are cyber liability insurance and errors and omissions insurance.

What does a business owner’s policy NOT cover?

What a business owner’s policy does not cover will vary greatly, depending on any additional packaged policies. In general, a BOP will not cover:

Professional liability

A BOP will not cover any expenses related to claims of inadequate work delivered or performed for a client. Some carriers offer limited coverage for professional liability as a BOP endorsement. However, this exposure is best covered under errors and omissions insurance.

Employee injuries

While BOP includes general liability which covers third-party injuries, it will not cover employee injuries. Injuries to employees that are sustained within the course and scope of their work duties are only included in workers’ compensation insurance policies.

Employment practices liability

If an employee files a discrimination, harassment, wrongful termination, or hiring claim, your company will need to have employment practices liability insurance (EPLI). A BOP will not cover claims due to harassment, wrongful termination, or discrimination lawsuits or settlements.

Natural disasters

Natural disaster property damage is a common BOP exclusion. Unless you add additional coverage options, a BOP typically does not cover commercial damage from floods or earthquakes.

How much does a business owner’s policy cost?

A BOP is a cost-effective way to get a combination of policies that cover your small business against a combination of the most common insurance claims. There is no one-size-fits-all insurance policy, but there are several factors that impact BOP premiums. These include:

• Industry risk: Companies that operate in more hazardous lines of work will see higher rates.
• Property value: You must know your property’s reconstruction cost to get an accurate BOP estimate. It will help determine the cost to replace or repair damaged items. This is something an insurance agency or carrier will typically help with.
• Business location: The locations where you operate your business will impact insurance costs. Higher crime areas will often drive up rates.
• Years in business: Longevity can show the ability to maintain risk exposure and reduce premiums.
• Policy limits: The amount of policy coverage will greatly determine rates.

With so many factors to consider, we invite you to speak with one of our experienced commercial insurance agents. They can inform you of available options and help you make sure you get the coverage you seek.

Talk to one of our licensed agents about available rates >

Should you purchase a business owner’s policy or just general liability insurance?

If your business owns valuable commercial assets, then it is a good idea to consider a BOP instead of general liability insurance. A BOP offers both third-party injury and property protection at a lower cost than purchasing these policies independently.

There is no requirement to purchase either of these policies in most states, but they provide companies with the peace of mind that accidents or disasters won’t impact the future of the business.

How much business owner’s policy coverage do I need?

BOP limits can vary, depending on a number of factors. The minimum policy limits typically suggested are $1 million in coverage per occurrence and $2 million aggregate coverage for the policy term.

There is no reason a company couldn’t purchase more coverage, but because BOPs accommodate small businesses, this is often the most common policy size.

Can a business owner’s policy be customized?

BOPs are particularly customizable and were made to be adaptable to the specifics of your small business. Some common add-on coverages or policies include:

• Cyber liability insurance
• Errors and omissions insurance
• Business interruption insurance

How do I make a business owner’s policy claim?

Most carriers have online claim reporting capabilities, or you can call their toll-free claims reporting phone number. At Winooski Insurance Agency, we are available to assist you through the claim reporting process. Our clients can rest easy knowing our experienced agents are ready to help when needed.

View a list of our partner carriers and instructions on where to file a claim with each.

Why should I get small business insurance through an independent agency?

Winooski Insurance Agency has been an independent insurance agency for almost 40-years. During this time, we have created long-term relationships with a multitude of insurance partners which allows us to present you with a broad range of coverage options at competitive rates. We’re committed to helping you address your unique requirements.