A business owners' policy — or BOP — is a common form of business insurance. It provides coverage for the basic needs of most companies. A service business owner - such as an accountant or a plumber - can use this type of policy to safeguard their company.
However, a BOP may not offer enough coverage for all needs. Therefore, it is critical for business owners to look at what they own carefully. Then, they should assess the risks to the company and customize a BOP to meet their specific needs.
Let's delve into why this is so critical.
What Does BOP Cover?
For a service business, a BOP can offer several key protections. Plans differ somewhat between insurance providers. Common BOP coverage includes:
- Commercial Property Insurance. This works to cover your company's assets. Those assets include the building the company operates in, along with equipment, inventory, and computer systems. Commercial property insurance protects signage and similar items on the property.
- General Liability Insurance. BOPs also usually provide basic liability insurance coverage. This coverage provides protection from claims against the company, up to and including lawsuits. It can cover settlements and provide legal defense support.
Is A Basic BOP Enough?
Probably not. A basic BOP is a good place to start. But it's better to customize it to offer more protections for your company. Here are a few reasons why you may need to do just that.
- Your business has employees. Ensure you have a workers compensation plan to cover worker accident claims for employee illness or injury.
- Your business uses a company car. Many service business employees travel to and from customer locations. You will need commercial auto insurance.
- Your business operates in a high-risk industry. You may need a higher level of liability protection. Professional liability insurance may offer assistance.
- You use a computer network. Cyber liability insurance is critical for a growing number of companies. If you collect names, addresses, credit card info or similar sensitive data from your customers, you need this insurance. It can help you in the event of data loss or theft.
- You have employee risks. Most companies need an employee dishonesty policy. It protects against claims made by customers against dishonest employees, such as identity theft.
A BOP combines the largest portions of your business's insurance need. Service businesses will often find this is the best way to protect their company. However, you'll get maximum benefits if you flesh out your policy to offer complete protection in all key areas of your operation.
Work with a Bruening Insurance agent to establish the right elements of coverage. Contact us today to get started!