Whether you have a home-based business or an established corporation, the right business insurance policy will provide protection against everyday risks. It will safeguard your assets and income, and may cover legal costs (known as liability).
Some policies even combine property and liability coverage into one convenient package. Choosing the correct business insurance depends on your specific business risks, and some policies are legally mandated in certain states. Contact AZ Business Insurance now!
A Business Owners Policy, or BOP, bundles key coverages into a single policy to help small businesses manage risks and grow confidently. It typically includes general liability insurance and commercial property insurance.
General liability protection safeguards your business from claims made by customers for bodily injury and damage to their personal property while on your premises. It also covers legal fees if you are sued for reasons like product contamination, workplace injuries and advertising mishaps. Commercial property coverage helps reimburse your business for losses to fixed assets such as equipment, inventory and furniture if an incident occurs. It may also pay for other things related to a disaster, such as debris removal and loss of income.
In addition, a BOP may include other coverages, such as business interruption insurance or extra expense coverage. These provide reimbursement if an event disrupts your operations and requires you to shut down. These may cover rent for a temporary space, employee wages and the additional expenses of operating out of a different location.
The size and type of your business determines whether or not you’re eligible for a BOP. Current ISO business owners policy rules limit eligibility to firms with less than $6 million in revenue and a primary business location that measures under 35,000 square feet. This includes retail stores, apartment buildings and offices. Insurers may offer a micro-BOP for businesses with lower risk, low revenue and smaller commercial spaces.
If you’re looking for a BOP or other business insurance policies, NerdWallet recommends shopping with Next. This startup simplifies the process by offering quotes, purchase and renewal online. It also offers workers’ comp and other common types of business insurance.
General Liability
General liability insurance protects small businesses from third-party bodily injury and property damage. This coverage can pay for things like when a non-employee slips and falls in your business or if a client’s computer is damaged by your company’s work. It can also cover legal expenses and medical payments in the event of a lawsuit resulting from these incidents.
It’s a common form of business insurance and most types of businesses benefit from having it. It’s often the first type of policy that small business owners purchase because it shields them from many common, everyday business risks.
In addition to covering physical injuries, a commercial general liability policy can also protect your business against more intangible claims such as reputational harm or advertising injury. For example, if someone sues your business over something you or one of your employees said in an online review or social media post, it could cost thousands of dollars to defend your company.
Our licensed insurance agents can provide you with a list of coverage options for your business and help you select the limits that best meet your needs and budget. We offer both claims-made and occurrence-based policies for your commercial general liability. In addition, we can add liquor liability and errors and omissions (professional liability) insurance to your business policy.
Some industries are required to have a commercial general liability policy in order to fulfill the terms of contracts or leases. Others simply want to have the peace of mind it provides and know they can cover the costs of a lawsuit.
Business Auto
Your business may operate out of a car, truck, van or trailer, and any vehicle that’s regularly used for your business requires commercial auto coverage. This is not to be confused with personal auto insurance or a homeowners policy, which typically excludes business use of vehicles and only provides minimal protection in the event of a work-related accident. Without a BOP, you may be on your own to pay for damages, which could not only financially drain your company but also put your personal assets such as your home or car at risk.
A BOP is a tried and true combination of broad business coverages that can help you address many incidents at once. A typical policy contains business property and general liability coverages, as well as a business auto policy that protects your company cars, trucks and other vehicles.
The BOP’s business auto policy covers leased, hired and non-owned vehicles that you and your employees use in the course of operating your business. Some states require it to include medical payments and uninsured/underinsured motorists coverage. You can choose to add physical damage coverage that includes collision, comprehensive or specified perils as well.
Another option available through the BOP is professional liability, which offers protection if you or your employees are sued over their services. While it’s unlikely, a lawsuit against your business can threaten not only your livelihood but also everything you own. Adding this type of coverage to your BOP helps keep it affordable and provides peace of mind.
Depending on the nature of your business, your BOP may need to be customized for additional coverages. Talk to your independent agent to learn more about the coverages available through the BOP and how you can customize it to meet your specific needs.
Worker’s Compensation
Workers’ compensation coverage protects businesses from the financial impact of employee injuries. It also helps ensure that employees receive medical treatment that is necessary for a speedy recovery. In addition, it provides a mechanism for the settlement of employee death benefits. This coverage is mandated in most states and is typically included in a business owners policy.
Insurance rates are determined based on the experience of similar businesses in a given state. The losses of these businesses are aggregated into classes, and then economic factors are applied to determine the rate. Experience rating is more sensitive to the number of accidents (loss frequency) than to the dollar value of claims, because “frequency breeds severity.” A greater number of injuries may indicate that overall working conditions are less safe, even if the individual injury amounts are not very large.
All businesses must have a workers’ comp policy in place, and it can be obtained through a private insurer, the New York State Insurance Fund, or self-insurance. Self-insurance is becoming more common as a way for businesses to control their workers’ comp costs.
It is important to understand that the premium charged for workers’ comp depends on payroll. It is therefore critical that the payroll records of a business are accurate and updated on a regular basis. If a business experiences fluctuations in its payroll, it is important to work closely with the insurance agent to adjust the workers’ comp premium accordingly.
It is also important to note that any executive officer or director of a publicly held corporation who renders actual service for the company for pay shall be included in workers’ compensation coverage unless he/she elects to be excluded by executing a written waiver. Owners of private corporations receiving wages irrespective of profits may exclude themselves from workers’ compensation coverage by executing a written waiver.
Business Owner’s Policy (BOP)
A business owner’s policy (BOP) bundles general liability insurance and commercial property insurance, usually for less than if you bought each policy separately. Designed with small businesses in mind, a BOP can be an excellent choice for companies that have fewer than 10 million in assets or revenue each year and whose buildings and equipment are valued at less than $15 million. It’s important to note, however, that a BOP excludes coverage for things such as cyber liability protection for data breaches and workers’ compensation insurance for work-related injuries and illnesses. These specialized policies can be purchased separately, as needed.
General liability insurance safeguards your company against third-party claims of bodily injury or damage to personal property. If a customer trips in your store and breaks an arm, or if a client’s computer crashes, or if a staff member makes an inflammatory social media post that leads to a lawsuit, general liability can help pay for legal fees and financial settlements, up to a preset limit.
Commercial property insurance protects the physical assets of your company, such as furniture, office equipment and inventory. This is essential for small- and medium-sized businesses because it can cover items lost to theft, vandalism, fire or extreme weather. It may also provide reimbursement for lost income if your business is forced to close temporarily due to a covered event.
Many businesses can benefit from a BOP, including retail stores, small restaurants, apartment buildings and office-based services. However, it’s important to keep in mind that if your business has more than a few employees, has a higher revenue or asset value, or operates in an industry with higher risks, you might need a more tailored commercial insurance package.