What is a businessowners policy?
A businessowners policy, sometimes referred to as a BOP, is a type of commercial insurance that combines insurance coverages you'd normally buy separately into one bundle. The standard combination is general liability and property insurance, but these types of policies routinely include business interruption insurance, as well. Insurance providers generally target businessowners policies at small- to medium-sized businesses. Small- to medium-sized businesses that are more complex, as well as large businesses, tend to purchase commercial packages instead of businessowners policies. That's because commercial packages usually provide broader coverage options and higher policy limits.
If desired, you often can customize a BOP to meet your specific needs. For example, you can add protections for situations like mechanical breakdown, spoiled merchandise, forgery, electronic data, identity theft, valuable papers and records and even pollutants. As your business grows, you might find that amending your policy toward these inclusions makes sense given your goals.
Not all businesses can purchase a business owner's policy. To be eligible, you must meet the specific criteria set by the insurance provider. Those criteria can vary, but insurance companies typically will consider your revenue, the physical size of your company, and how many employees you have. AmTrust agents can make sure you meet the requirements for eligibility prior to designing a new policy for you.
What are the benefits of businessowners policy insurance?
Like any other form of insurance, businessowners policies enable business leaders to protect companies from a variety of risks, hedging against potential financial losses and improving stability. This protection is especially important for smaller or midsize companies, who often don't have extra funds to recover as well from disasters.
Secondly, bundling coverages is usually less expensive than buying many separate policies. In this way, the practice isn't much different than what cable, Internet, and phone companies do, or how you can save on most products by buying in bulk quantities. Premiums on this type of insurance also may be deductible as a business expense on your company's taxes.
You also might find that your BOP is easier to deal with from both a logistical and time perspective. You work with the same provider for all included coverages and have fewer documents to reference and track.
Lastly, by purchasing a BOP from AmTrust, you gain peace of mind knowing that, should something go wrong, you'll be in a financial position to rebound well. With that worry out of the way, your focus can stay where it should—on growing your company so that it can thrive.
What does businessowners policy insurance cover?
Exactly what is covered in a business owner's policy depends on if and how you customize it. If you get a standard AmTrust BOP, here's the minimum you can expect to receive:
- The general liability portion of a businessowners policy offers coverage for third parties who experience harm to themselves or their property because of something you or your workers did or failed to do. For example, your BOP might cover an instance where a customer is injured by a product that wasn't assembled properly. It usually allows coverage for the third party's legal fees and medical costs. General liability also can cover advertising injury, which deals with offenses like libel and copyright infringement.
- The property portion of a business owner's policy covers buildings you own or rent. But it also covers other physical property you have, such as your desks or machines. This includes items you keep and use that belong to others. Most often, property coverage is "named-peril," meaning you're covered only for specific events identified in the policy, such as a fire. But property coverage may be "special" or open-peril, as well, which just means your coverage is more comprehensive and not limited by specific identified events.
- The business interruption coverage protects you when some event—storms, hacking, or another unforeseen circumstance—temporarily disrupts your ability to sell or interact with your customers and other interested parties. It can replace money you would have earned through those interactions and provide funds to operate in a temporary location.
Importantly, even though you often can customize your businessowners policy, there are certain types of coverages that are not included, which you must purchase separately. Examples include workers' compensation, auto and disability insurance.
It's not unusual for business leaders to be unsure of how much coverage they need under a business owner's policy, or whether they can benefit from customization. After all, each new venture can have unique considerations that even seasoned business leaders haven't had to deal with before. The market is also in a constant state of flux, which can change business goals and requirements, as well as valuations.
AmTrust agents have the passion and industry knowledge to make "perfect fit" recommendations for you. Our agents are experienced, knowledgeable and available to develop a BOP that offers the exact coverage your business needs. Our dedicated agents and claims professionals ensure you can use and adjust your plan as needed to get the most benefit from your businessowners policy possible.