What is Business Insurance?
There are many forms of business insurance; business is very unpredictable but your insurance options should be clear. A Business Insurance package better known as a Business Owners Policy (BOP) is the most efficient, convenient and affordable business insurance option available but not all businesses qualify for the business owners package policy.
The business owners package is generally designed for a select class of small businesses combining separate elements of a commercial insurance policy into a convenient package policy; thus offering an affordable insurance option to small businesses.
Successful business owners clearly understand that business insurance is one of the basic fundamental keys to success; without this important protection, the owner would not be providing security against lawsuits, accidents and errors leading the business into a costly and possibly terminal path for the business.
It is always recommended when purchasing business insurance to start with a Business Owners Package (BOP) and expand the policy until the policy can no longer provide the coverage needed due to the nature of your business operation or the volume of business. Once the BOP is no longer available due to your success or change in operations, you would need to purchase a Commercial Insurance policy thus customizing a larger package of insurance elements to provide security for your growing business.
Business Insurance has a variety of elements that comprise a package policy; though many of these elements are optional, it is important to understand each and every one and discuss with your selected insurance professional how they may or may not apply to your specific business.
Some of these elements are: General Liability Insurance, Business Personal Property Insurance, Commercial Property Insurance, Non-Owned Vehicle Liability Insurance, Electronic Data Loss Insurance, Commercial Crime Insurance, Workers’ Compensation Insurance, Errors and Omissions Insurance, and Commercial Auto Insurance; these are all elements of commercial insurance and each element has been designed with the protection against risk in mind.
General liability insurance is included in all policies as it is the primary concern of all business; this valuable coverage protects the business from third party claims arising from bodily injury and property damage.
Business personal property insurance provides coverage for business furniture and equipment. Commercial property insurance is essential if the business owns the office or building where the business is located; this coverage would provide building protection against the risk of fire, lightning and a list of other covered perils. In the event of a covered loss, this coverage should also be linked with business interruption insurance which will provide for reimbursement of lost income should the business not be able to operate due to the covered loss.
Hired or non-owned vehicle liability insurance is important where an employee may be using their own vehicle or a rented vehicle and has an accident while driving for the business and the business may be held liable for the accident. Vehicular liability is an element that is never covered under General Liability.
If the business relies on electronic data, electronic data loss coverage may be essential for the business and may be added to a business owners package policy. A loss of business data by a fire, computer virus or other peril could result in lost income which may be an essential component to your insurance protection.
Commercial crime insurance coverage will provide protection relating to claims of dishonesty, forgery or theft of a client’s property by an employee of the business. There may also be additional points of exposure that only an experienced business insurance professional would be able to explain further.
Items that are generally expected by the consumer in business insurance are as follows:
- General Liability Insurance
- Business Personal Property
- Business Interruption Coverage
- Commercial Auto Insurance
- Commercial Property Insurance
- Hired or Non-Owned Auto Coverage
- Professional Liability Insurance (Errors and Omissions)
- Workers’ Compensation Insurance
The above are simply examples of coverage that may or may not be available on a business insurance policy.
In summary, it is best for a new business to start out with a Business Owners Package (BOP) after consulting with a professional regarding the available elements of coverage and how they would relate to the specific business risk. It is important not to focus on the cost of coverage until all the elements of coverage are reviewed; it is also important to find a business insurance professional that doesn’t give the sense of urgency to make the sale but rather fully answer all the consumer’s questions and allow the customer the opportunity to move forward with the insurance when necessary.
There are a number of insurance carriers that write Commercial Business Insurance in California and other States. It is essential that the carrier offers a Direct Billing method, has a 24 Hour toll free number to contact in the event of a claim and has at least an ‘A’ rating by A.M Best offering the business owner a sense of security.