When you open your first business, you have a laundry list of things to do. You probably think about renting office space or buying equipment. You also need specific insurance policies to protect your business. The most common policy is the Business Owner Policy.
The business owner policy provides a package of insurance including the major property and liability policies required. As long as your business requires you to have people coming in for shopping or meetings, you need a liability policy. As long as you have a physical office, you need a property insurance policy. Obtaining a business owner’s policy ensures that you pay a lower premium than the total cost of the coverage if you purchased individual policies.
You get a lot of coverage packed into this one policy. In addition to liability and property damage protection, you also get peril insurance and business interruption coverage. These policy packages also let you add components to the insurance policies, such as crime, fidelity, forgery and spoilage of merchandise insurance.
Not every business needs nor qualifies for a business insurance policy. Insurance providers decide if a business qualifies for this policy type by analyzing four criteria:
• business location,
• the size of the location,
• the class of business,
A business that misses one criterion may still qualify for a policy under a set of special considerations eligibility qualifications. These business owners policies typically serve small- and mid-size businesses.
Each portion of the policy covers a different type of insurance need. The property insurance functions in a similar way to the named-peril coverage you probably have as a part of your homeowners’ policy. Named-peril coverage pays for repairs or replacement when an event or peril occurs that is named in the policy. The most commonly included perils like fire, explosion, smoke damage, wind damage, vandalism, etc. Occasionally you can find an all-risk or open-peril coverage policy. The property portion applies to buildings you own, rent or long-term lease, plus the additions and/or any under construction additions in progress and outdoor fixtures.
The same section also covers business equipment. That includes items the company owns, items owned by a third party but in the company’s care, such as clothes left at dry cleaner’s or items in storage, such as product stock.
That means you get reimbursed for damage to your building and your business equipment and product stock if a named peril occurs. The property section protects all types of property. But what if a customer trips and falls in your store?
The liability portion of the policy protects people. If someone falls and hurts themself in your store, the liability part of your policy pays for their medical bills. It also covers you if people sue you because of a product defect or libel or slander.
These policies also include a component called business interruption insurance. This covers the business’ loss of income form a fire or other named-peril if it disrupts or impedes the business’ operation. Some policies cover the expense of moving operations to a temporary location.
You can save money and time by purchasing a business owner’s policy. It wraps all the needed policies into one package. Contact our agency today to learn more about qualifying for a business owners’ policy.