Business Owners Insurance 101

Written By David Matz

If you are a business owner, there are a few basic things you should know about business insurance.  Today, the small business owner has the advantage of purchasing a basic Business Owners Policy (BOP) that provides broad protection suited for a small business owner.

A BOP policy is set up very similar to your Homeowner's policy.  Much like a homeowner's policy, a BOP combines into one policy most of the protection you need as a business owner.   Coverage includes property owned and used in the business, protection for an owned building as well as furniture, fixtures, permanently installed machinery and equipment, business personal property and property of your customers entrusted to you.  Perhaps more importantly is coverage for lost business income. This also includes the extra expense incurred in restoring business operations. Equally important and beneficial is coverage for money, securities and employee dishonesty.

Again, much like a homeowner's policy, the BOP provides liability and medical expense coverage.  This is important as it protects you from claims or suits brought about as the result of business operations or medical expense for injuries sustained at the business location even though you may not be legally liable.

It's also a good idea to be familiar with what can impact the premium of your BOP.  Factors that impact your insurance premiums include the amount of your business revenue, number of employees, limits of liability and the amount of property coverage desired.   Also the deductible you choose can impact your premium; the lower the deductible, the higher the premium.

When shopping or comparing a BOP, consider such things as replacement cost coverage on your building and personal property (versus actual cash value coverage).  Do you have mechanical breakdown coverage, business income coverage as well as employee dishonesty and money/securities coverage?