3 Reasons Your Small Business Needs a Business Owners Policy and How To Find the Right One For You

As a small business owner, you want to do the most you can to protect your employees and your business’ finances. The best way to insure that your small business has the coverage it needs to stay afloat is by investing in a business owners policy to protect your company from any unforeseen issues that come its way. If you’ve just started your business and are wondering what insurance plan is right for you, read on to learn all about what a business owners policy can do for you and your company. 

What is a Business Owners Policy?

A business owners policy is a package insurance deal a small business can buy that contains a number of important different types of insurances that they may need to protect their business. Not all businesses will qualify for a business owners policy. Typically, what types of companies that are eligible is determined by company size. A larger company will likely have more complex business risks, and therefore need more customized insurance policies tailored specifically to fit their needs. As such, it’s often at the benefit of large businesses to purchase multiple insurance policies for each of their specific needs so they have the full, comprehensive coverage that they require. Additionally, while large businesses will likely have the funds to cover lawsuits brought against them or minor property damage, these scenarios can be a substantial financial blow to small businesses that don’t have as much capital. With that in mind, it’s essential for small businesses to have the right insurance coverage to protect their finances as best as possible when just starting. 

What Types of Insurance are Typically Included in a Business Owners Policy? 

Three main types of insurance are typically included within a standard business owner’s policy. These insurances include: 

Commercial Property Insurance

Commercial property insurance protects your business in the case of property damage. This includes not just the physical building that your business operates out of, but also the assets inside it including company records, equipment, furniture, product inventory, among others. Commercial property insurance is essential for keeping your business’ physical space and your funds safe in the case of unexpected damage or loss. 

General Liability Insurance

General liability insurance protects your business from claims of damage brought against you by a third party. It covers a number of scenarios including bodily harm, damage to another person’s property, product liability, operational injury, personal injury, as well as the legal fees that might arise from any case like the ones mentioned above being brought against you. While we would hope that no customers of our businesses would be accidentally harmed onsite or at home with one of our products, it can still happen. It’s best to be prepared for any possible accident and the legal action that could follow. 

Business Interruption Insurance

Business interruption insurance covers costs when your business is forced to shut down temporarily due to natural disaster, theft, or unexpected falling objects. It can be a huge hit to small business owners when their physical locations are damaged. First and foremost, it’s a big profit loss to not be able to sell products for a prolonged amount of time. Secondly, there’s also the cost of repairs to keep in mind. In order to avoid even more stress when dealing with property damage, it’s important to have a business interruption insurance policy in place to ensure that you’ll have coverage to help lift some of that heavy financial burden. Typically a business interruption insurance policy will cover up to a year of business expenses, so you won’t have to worry about making business rent payments or paying your employees. In contrast, your business gets back on its feet. 

Customizing your Business Owners Policy

Business owners’ policies are also incredibly customizable, so it’s easy to find a package that will fit your business needs. You can add additional insurance endorsements to your business owner’s policy to cover employee theft, extra expenses for relocation during business repairs, food spoilage for businesses that sell perishable products, and equipment breakdown, among others. While adding on additional endorsements will raise the cost of your insurance, it’s important to have as broad of a spectrum of coverage that you can for your business to prevent any kind of accident that comes your way. 

In Conclusion

Investing in a business owner’s policy is the perfect way to get the insurance coverage you need for your small business. Commercial property, general liability, and business interruption insurance can help protect your business from a wide array of potential financial setbacks. Additionally, you can add various insurance endorsements to further protect your business in specific ways. By having the coverage you need, you can rest assured that your small business can grow without interruption.