No matter the nature of your business vehicles or computers, various policies exist that provide coverage against property damage, lawsuits and lost income due to unexpected situations.
Certain forms of business insurance, like employers’ liability coverage, are required by law while others can simply be considered wise investments for any organization.
Business Owner’s Policy (BOP)
A BOP bundles general liability and commercial property insurance at reduced cost for small businesses, providing essential protection from common third-party accidents or lawsuits that arise during operations – for instance if a client slips and falls in your office or brand/copyright infringement is ever claimed against your brand/copyright then this type of policy would cover legal fees settlements judgments as well as property damage caused by work performed such as broken computer screens or stolen equipment.
The commercial property portion of a BOP covers your company’s tangible assets, such as buildings you occupy or lease, equipment and inventory. It also protects rented space as well as mobile products like tools and machinery that you are transporting between sites. Furthermore, it includes coverage in case an extreme weather event or fire forces your company to temporarily suspend operations and temporarily close down.
Your business size, location, claims history and property value all play an impactful role in the cost of your Business Owners Policy (BOP). An insurer may provide optional coverage components that allow for customization of your policy such as crime, vehicle and flood. Despite being part of this one-stop solution, more specialized policies such as workers’ compensation or cyber liability must be purchased separately from this one-stop solution.
General Liability
General Liability Business Insurance, also referred to as Commercial General Liability, covers legal expenses, settlements and judgments up to your policy limit. It offers protection from common risks such as someone tripping in your store and breaking their leg, or accidentally damaging client property during service calls. Furthermore, this type of policy provides coverage against costs related to slander or libel claims (though not workers’ comp), but not costs related to workers’ comp. Typically these policies come bundled as part of a Business Owners Policy or BOP bundle policy.
Professional liability, or errors and omissions insurance, is an essential component of any small business. It helps cover potential lawsuits filed by dissatisfied customers alleging negligence on your part or that of employees that has resulted in financial losses to them – an often neglected aspect of business insurance coverage.
Directors and officers liability (D&O) coverage can protect your assets from lawsuits brought by shareholders, investors and others against your company. It helps cover legal judgments and costs related to unlawful acts, poor investment decisions, disclosing confidential information without authorization, conflicts of interests and gross negligence. While D&O typically does not come included with BOP policies, it may be purchased separately and combined with other forms of business insurance such as commercial property coverage and business interruption coverage for optimal protection.
Commercial Property Insurance
Commercial property insurance helps cover the costs to repair or replace physical assets like furniture, inventory and signage if they’re damaged due to an event covered by the policy. Usually this coverage takes into account depreciation when assigning value, or actual cash value (ACV), giving each item its current market value as per current market conditions. It often also includes business interruption coverage which reimburses policyholders for lost income when disaster forces them to close or relocate their business.
Boiler and machinery insurance provides additional protection for equipment like boilers, machinery and computer servers as well as crime, computer fraud and electronic data loss coverages. It typically comes as an add-on policy.
Small businesses usually choose a commercial package policy or business owner’s policy that combines commercial property insurance, general liability and business interruption coverage into one policy for less expensive options than purchasing these separately. Some insurers also provide standalone commercial property policies as well as other coverages tailored specifically for businesses. To help make your choice easy and determine what options best fit your company, use our simple online application now and compare top U.S. providers’ coverages against each other!
Product Liability
Product liability policies protect businesses against third-party damages caused by their products, making this coverage essential for those that manufacture, distribute, sell or import them; it can even help safeguard services providers.
General Liability insurance policies often come bundled with product liability policies and cover the most frequent forms of small business damage, including slip and falls in your store or employees accidentally breaking customers’ phones – this coverage should cover legal costs and compensation payments associated with either event as well as defamation or false advertising claims, in addition to typically providing directors’ and officers’ liability protection as well.
Average product liability policy premiums can vary significantly and depend on several factors, including size, industry and risk level of the business in question. Businesses that face greater risks, such as those producing food, building or vehicle products may pay more in premiums; the costs can increase further if class action litigation funded by third-party litigation funding companies is involved; provided appropriate limits are in place though, product liability claims should not exceed annual business expenses.
