Each business has its own unique risks, even if they are in the same industry and offer the same services. This is why understanding your business needs before purchasing insurance coverage is crucial. Being underinsured or lacking the proper coverage in the event of a loss would mean paying for damages out-of-pocket. And that’s not cheap; the average customer injury or property damage claim is $30,000!
Business Owners Policy
A business owner’s policy (or BOP) can offer you the basic commercial property and liability coverage that you need all in one package, according to TheBalanceSmb. It typically includes liability, property, and business interruption insurance, but you can opt-in for additional coverage to meet your business’s specific needs. And since package policies tend to be generalized in terms of the risks they protect against, customizing your BOP is imperative for insuring your business.
4 Tips for Buying Your BOP
If you’re shopping for a BOP, here are few tips on how to go about it and what to look for:
1. Determine the potential risks in your business
To ensure your BOP provides you with adequate coverage, know the risks that will most likely occur in your business operations. Afterward, list out the types of commercial insurance you will need to protect against these risks and check to see if the BOP in question fulfills those needs. If it doesn’t, discuss your additional insurance needs with your insurance professional to make arrangements for adding the necessary extra coverages to your policy. These may include professional liability, data breach, mechanical breakdown, or spoilage of merchandise.
Note: For some coverages, such as Workers Comp and Commercial Auto Insurance, you may need to purchase separate policies.
2. Look for a reputable insurer
Insurance costs money, so make sure you’re getting your money’s worth. One way to achieve this is by purchasing your BOP from a top-rated insurer known for offering reliable coverage, timely payouts, and consistent terms. You can tell an insurance company you can trust by:
- Looking at its rating, ideally, you want and insurance companies with an “A” rating
- Reading its reviews online
- Consulting your family members, friends, and fellow business owners regarding their experiences with the company
- Working with a reputable, licensed insurance agent
3. Read your business owner’s policy thoroughly
Imagine being sued only to find out that your BOP does not cover the particular claim that has resulted in the lawsuit. That would mean paying for the legal costs out-of-pocket, which can have a devastating financial impact on your business (even bankruptcy). Avoid these repercussions by taking the time to read and understand your policy to ensure it offers the right coverage for your business.
4. Shop for options
Even if the first BOP you come across feels right coverage-wise and price-wise, take the time to shop around and look for better rates. An insurance agent or broker can help you find the best rate for a Business Owners Policy that’s suitable for your business needs. This will make your business insurance buying process a lot easier and save you money in the process.
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