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<\/a><\/p>\nIn my years reporting on business and finance, I\u2019ve learned that launching a business is fraught with challenges. Business owner\u2019s policies are one type of insurance that can help mitigate some of these risks. That may include protection from theft, lawsuits, and unforeseen accidents.<\/p>\n
In this article, I take a deep dive into the ins and outs of business owner\u2019s policies. I\u2019ll explain which businesses benefit most from this type of coverage and what to look for if you need to shop for the right option. Let\u2019s dive in.<\/p>\n
Table of Contents<\/strong><\/p>\n <\/a> <\/p>\n A business owner\u2019s policy is a type of insurance designed for small- to medium-sized operations with fewer than 100 employees. Also known as a BOP, a business owner\u2019s policy is \u201cdesigned to shield from things that can cause big harm to business,\u201d said Sam Taylor, an insurance expert at the consulting firm LLC.org.<\/p>\n These plans bundle several types of coverage, according to Gregg Barrett, CEO of the property and casualty administration software firm the WaterStreet Company. These plans often focus on protecting the business\u2019 assets, shielding owners from potential lawsuits, and covering losses during an emergency. Putting all these protections in one plan can help owners manage their coverage more easily.<\/p>\n <\/a> <\/p>\n Barrett notes that business owner\u2019s policies offer three core protections:<\/p>\n Converging a business\u2019 property includes the space itself, equipment, furniture, and inventory. Plans often protect these assets both from unplanned accidents and targeted damage. For example, fire, theft, vandalism, and natural disasters are often all covered.<\/p>\n Liability insurance involves covering \u201clegal costs, medical, [or] property damage caused to others,\u201d Barrett told me. For example, if a customer sued a business for an accident that happened in the shop, a business owner\u2019s policy can help cover the cost.<\/p>\n The third category covers lost income and operating expenses if your business is forced to close. Let\u2019s say your area is evacuated during a fire or closed during a pandemic, your BOP can compensate some of your losses.<\/p>\n Reilly James Renwick notes that interruptions are often overlooked.<\/p>\n \u201cMost policyholders normally never think their BOP would compensate them for lost income due to a covered event, but that claims require the documentation of their income streams and expenses. Without these records, businesses could fail to get full benefits they are entitled to,\u201d says Renwick, chief marketing officer of the mortgage broker firm Pragmatic Mortgage.<\/p>\n Certain business owner\u2019s policy providers allow you to add other types of coverage to your plan. For example, Barret notes that some insurers allow business owners to add coverage for cyber liability, data breaches, and professional liability. That\u2019s a suggestion to strongly consider, as data breaches are on the rise<\/a>.<\/p>\n Pro tip: <\/strong>Study what your BOP covers to make sure you\u2019re getting the most out of your policy.<\/p>\n A BOP is much more comprehensive than general liability insurance. In fact, a BOP typically includes general liability insurance, whereas the reverse isn\u2019t true. The chart below, provided by WaterStreet Company and edited for clarity, shows the similarities and differences between the two types of insurance offerings<\/a>.<\/p>\n\n
What is a business owner\u2019s policy?<\/h2>\n
What does a business owner\u2019s policy cover?<\/h2>\n
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<\/p>\nBusiness Owner’s Policy vs. General Liability Insurance<\/h3>\n
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