Business Owner Policy
Insurance companies selling business insurance offer policies that
combine protection from all major property and liability risks in one
package. (They also sell coverages separately.) One package purchased by
small and mid-sized businesses is the business owners policy (BOP).
Package policies are created for businesses that generally face the same
kind and degree of risk. Larger companies might purchase a commercial
package policy or customize their policies to meet the special risks
they face.
BOPs include:
Property insurance for buildings and contents owned by the company --
there are two different forms, standard and special, which provides more
comprehensive coverage.
Business interruption insurance, which covers the loss of income
resulting from a fire or other catastrophe that disrupts the operation
of the business. It can also include the extra expense of operating out
of a temporary location.
Liability protection, which covers your company's legal responsibility
for the harm it may cause to others. This harm is a result of things
that you and your employees do or fail to do in your business operations
that may cause bodily injury or property damage due to defective
products, faulty installations and errors in services provided.
BOPs do NOT cover professional liability, auto insurance, worker's
compensation or health and disability insurance. You'll need separate
insurance policies to cover professional services, vehicles and your
employees.
How can I insure my home-based business?
Let's face it. Launching and running a business takes capital,
motivation and yes, even physical stamina to handle the stress and
demands of a new or growing venture. And it's risky. In fact, one out of
every five businesses fails within the first five years of opening.
Handling inventory, scheduling time, purchasing supplies, handling
payroll -- there are a myriad of procedures every home or small business
entrepreneur needs to know, but one of the most critical and often
neglected is buying proper insurance coverage.
TAKING A BUSINESS INVENTORY
What would happen if a fire or other disaster destroyed your property,
making it impossible for you to get back to business right away? Would
you remember what property had been destroyed? One way is by taking a
complete inventory of all your personal business property, determining
its value, and deciding what's worth insuring. Having an up-to-date
business inventory will help you get your insurance claim settled
faster, verify losses for your business' income tax return and help you
purchase the correct amount of insurance.
Start by making a list of personal business property, describing each
item and noting where you bought it and its make and model. Clip to your
list any sales receipts, purchase contracts, and appraisals you have.
WHAT'S THE RIGHT COVERAGE FOR YOU?
Then there's the question of what types of coverages you'll need. Aside
from personal business property, there is liability insurance, business
income, insurance for the building, boiler and machinery, human failure,
employee protection and management protection, among others. The type of
coverage you need depends on a number of factors including what kind of
business you operate.
BUSINESS OWNERS INSURANCE CHECKLIST
Click here to download the "Business Owners Insurance Checklist"
HOW TO KEEP COSTS DOWN
Start your search for a policy with trade associations or business
groups. In many cases, these organizations are able to provide reduced
insurance rates based on the volume of business they can offer the
insurance company. They've also negotiated coverage specific to your
type of business, which can save you significant time in determining
what you should cover. Also make sure that you are working with an agent
that understands your type of business.
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Additional Resources
The
Institute for Business & Home Safety
Small Business Administration
Brier Payne Meade, Topeka – (785) 233-1717
Brier Payne Meade, Kansas City – (913) 402-9576
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