If you’re a new business owner, you might not be aware of the different types of business insurance available. Here’s a quick overview of a Business Owner’s Policy (BOP).

Many new business owners opt for a business owner’s policy (BOP). This policy includes coverage designed specifically for small businesses.

A BOP typically covers three major items:

  • Property damage. Similar to a homeowners insurance policy, this covers damage to your building (owned or leased), equipment, furnishings, fixtures, displays and inventory.
  • Business interruption. If a covered loss strikes your store or warehouse, forcing you to stop operating for a period of time, your revenue stream is protected from lost business income. You can also choose optional protection that covers you in case a major supplier is affected.
  • Liability insurance for your business. Covers damages paid in judgments or settlements, and legal defense costs, if you are sued or held liable for accidental bodily injury or property damage arising from a covered cause of loss.

Businesses often need to carry more than one type of insurance, and your business’s insurance needs may be highly individualized. A knowledgeable agent can help you find the right solutions. For some states, carrying insurance is a requirement. Requirements may also vary by the type of business you own and the number of employees; however, workers compensation is required by law in most states and highly recommended if not.

In addition to the BOP, you may need other types of small business insurance coverage based on the kind of work you do, the size of your company and your location. These could include:

  • Insurance for home-based businesses. Even if you work from home, you’ll still need to insure your business. Generally, homeowners insurance offers the appropriate coverage level for home-based business-related property and equipment.
  • Professional liability insurance. This may be required as a separate policy, in addition to the BOP, to cover losses related to liability claims arising from mistakes or lapses of professional duties. Businesses offering professional services to their customers will often purchase this type of policy.
  • Commercial auto insurance. Company-owned vehicles will need to be insured through a commercial auto policy.
  • Health insurance. As a self-employed person, you may need to provide health insurance for yourself, your family and your employees.
  • Cyber insurance. Virtual businesses and most businesses that keep digital records online will likely need additional cyber protection against the risk of loss associated with data breaches and malicious computer intrusions.
  • Commercial umbrella insurance. Provides liability coverage beyond the basic business insurance policy limits in the case of a catastrophic auto- or business-related event.

As your business expands, you may outgrow the standard business owner’s policy and require more protection. It’s a good idea to review your insurance coverage annually and determine if any additional policies would offer a more beneficial level of risk protection. To speak with one of our agents and create a customized business insurance policy, call us at (630) 441-1003

For personalized guidance tailored to your business needs, our knowledgeable agents are here to help. Contact us for a quote at (630) 441-1003, and we’ll walk you through your options to find the right coverage for you!