A business owner’s policy (BOP) has been compared to a homeowner's policy for business. BOPs were first developed in the 1970s and have become a very popular form of insurance for small to medium sized businesses. BOPs combine some of the basic coverage’s needed by a typical small business into a standard package at a premium that is generally less than would be required to purchase these coverage’s separately. Business owners also like the simplified nature of the package as opposed to buying a collection of small policies. The efficiency also appeals to insurance companies and allows them to offer a lower premium for the package.
Most of the coverage’s that are needed by small and medium sized businesses, with the exception of auto and worker’s compensation, are generally included. This not only simplifies the process of buying the basic insurance coverage’s, but often gives a lower premium for businesses that qualify for a BOP. Business owner’s policies basically consist of property coverage, liability coverage and some additional types of coverage that most businesses require. Optional coverage’s can also be added to meet specific needs of the business.
Typically a BOP policy includes:
1. Property insurance (covering buildings, equipment and inventory).
2. Business interruption insurance (covering losses that cause you to shut operations or reduce production for a time). Business interruption insurance can provide money to offset lost profits or to pay continuing expenses (typically for up to a year for insured losses).
3. Casualty or liability protection (covering harm done by the employees or products to other people or their property).
4. Crime insurance (covering loss of money or securities resulting from burglaries or robberies or destruction) as well as losses from employee theft or embezzlement.
5. Liability insurance covering lawsuits arising from accidents (as when someone trips and falls on your business’s property) or when you sell a product that damages the customer’s property or you are accused of offenses such as slander, copyright or invasion of privacy.
6. Vehicle coverage for rented or borrowed vehicles. A number of other coverage’s such as flood insurance or earthquake insurance or owned vehicle coverage and specialized liabilities are generally not included in POBs. Some of these may be available separately for extra premiums. One of the distinguishing features of BOPs is that most automatically include business income and extra expense coverage (subject to some limitations).
Commercial Auto Insurance Coverage
In order to protect the company that you have built, make sure you have the right insurance coverage. If you operate vehicles for business use, then you need to make sure you have commercial auto insurance. If you use personal vehicles for company business, your normal automobile policy will not provide coverage, so you will need commercial automobile insurance.
A commercial auto insurance policy offers a variety of coverage’s in a typical insurance policy, which may include the following:
•Medical Payments - The medical bills of the driver and occupants of a covered business vehicle are paid through the medical payments coverage portion of your commercial auto insurance policy.
•Uninsured/Underinsured Motorist - When another driver causes an accident that your company vehicle is involved in, but they either have no insurance, or not enough coverage, your uninsured, or underinsured, coverage kicks in.
•Liability Insurance - In the case of the driver of your business vehicle being at fault and causing damage to another person’s property, or causing bodily injury to someone, the liability coverage section of your commercial automobile insurance policy will be used.
•Physical Damage - Physical damage coverage comes into play when a covered company vehicle is damaged in an accident. It also pays out for damage caused by flood, wind, theft, and fire.
Depending on what type of business you have, you may need optional endorsements added to your commercial auto insurance policy.
Business Interruption Don't Gamble With Your Financials!
Having to temporarily close a business damaged by a fire, natural disaster, or other similar event could cause significant financial hardship for a company. A commercial property insurance policy might pay to rebuild your physical property, but many business owners also buy business interruption coverage to pay for lost income, operating expenses, and extra expenses while they’re restoring their operations after experiencing a covered loss.
If your business relies on other providers, be they power suppliers, airlines, or freight companies you need to invest in Texas business interruption insurance. Even though your business may not be interrupted directly, one of your many vendors may experience this temporary hiccup. Do you really want to lose a generous portion of revenue on an insurance technicality?
Business Interruption Coverage, a.k.a, Time Element Coverage, can help prevent a business affected by a covered event from going out of business or into bankruptcy by its receiving the benefit of lost income payments for the period of restoration or replacement of the damaged property. Call us today to see if your business is covered by Business Interruption Coverage or get a quote for coverage.