- An astounding 40% of small business owners have no insurance, while 75% of businesses have inadequate insurance.
- A lack of insurance can spell disaster for your business. The payout for a single slip-and-fall incident is $10,000 to $50,000.
- Business owner insurance costs far, far less and can mean the difference between a thriving business and no business at all.
- A business owner policy is a lifeline you can’t afford to be without.
When the worst happens, insurance is a lifeline
A business owner policy combines key insurance coverage into one policy. Such coverage usually includes property, liability, and business interruption insurance. This type of policy can help save you money, as bundled policies generally have a lower premium. For small and medium-size businesses, this can be a great way to save money and still get essential coverage.
Forgoing insurance is a non-starter. A staggering 40% of small business owners have no insurance, and 75% of those insured are insured inadequately, even though seven million small businesses depend on insurance to stay in business. And only 47% of small business owners purchased workers’ compensation insurance, even though it’s required in most states, including Florida. A lack of insurance can spell disaster for a business.
Assessing risk is an important part of building a healthy business. Do you have enough money to pay out if your business property is damaged? What if someone slips and falls and you face a lawsuit? These things are scary, and the price you might pay can far outweigh what you spend on insurance premiums. This is where a BOP policy can be a business owner’s best friend. Let’s talk about what’s covered as well as some policy add-ons you might want to take a closer look at that offer additional protection.
Why you need a business owner policy
As we mentioned, a business owner’s policy neatly packages essential business insurance coverage. You might think you don’t need it, like that 40% of risk-taking business owners. But you do, and here’s why:
If a worker injures a customer or causes any property damage, you’ll need protection for them and your business.
If a customer or client slips and falls or is otherwise injured on your property, this helps pay their medical expenses as well as your legal costs.
Your business has a physical location
If you work out of your house or garage, own the building where you conduct your business, or rent a site, your business has a physical location.
You have business assets that could get damaged or stolen
Do you have computers? A cash register? Cash? Inventory? Without insurance, you would have to spend your own money to replace these items.
A business owner policy simplifies your coverage needs, combining two important coverages in one. Let’s discuss what this convenient policy covers. Then we’ll talk about some all-important additional coverage you might want to add for better protection and lower risk.
What a business owner policy covers
Business owner policies are ideal for small and medium-size businesses. They are created and priced for businesses that, in general, have the same kind and same extent of risk. This type of policy covers the three basics needed by every business:
1. Property insurance
This part of your business owner policy pays out if the property you use in your business is lost or damaged. This can be due to things such as theft or fire. If you own the building, it covers not just the building or structure (such as your home or garage) but also the personal property you use to run your business, such as furnishings, inventory, raw materials, computers, machinery, or any other essential items. Ask your agent about the three main types of commercial property insurance so you know which is right for you.
2. General liability insurance
In today’s litigious society, having liability insurance is more important than ever. Designed to protect you from general business risks, it protects against liability claims. These claims can arise from harm to customers, including bodily injury and property damage. Claims can arise from slip-and-fall incidents, tripping, or damage to a possession. It can also provide coverage for claims over inaccurate (the wrong price is published in an ad) or false advertising.
3. Business interruption
What would happen if a fire occurred inside your business and you couldn’t operate for weeks or even months? This part of your business owner policy would cover your loss of income when something happens to disrupt your business operations. It can also cover the expense of operating from a temporary location.
These are the basics, but many more risks exist out there in the world. As you are a responsible business owner who wants a healthy, thriving operation, it’s important to discuss your individual risks with your insurance agent. It’s also vital to talk about some policy add-ons that can offer you protection from whatever life (or the planet or criminals) throw at you.
Business owner policy add-ons
You may not need all of these, but most businesses do. Even if you currently have insurance, you should take a closer look and discuss what you need with your agent. Here are some policies you might consider adding to your business owner policy:
Commercial umbrella insurance gives you extra liability protection. It helps cover costs that exceed your other liability coverage limits.
Business auto insurance
A commercial auto policy pays third parties’ costs from bodily injury or property damage. Don’t count on being covered by your personal auto policy – if you use your personal vehicle and something happens, it will likely not pay.
Professional liability insurance
This is also known as errors and omissions insurance and is a necessity for lawyers, doctors, accountants, consultants, and real estate firms, to name just some professions. This policy helps cover your legal costs if a customer accuses your business of making errors, among other things that could spawn an expensive lawsuit.
http://iowacomicbookclub.com/2014/10/29 Cyber liability insurance
You can’t ignore the threats to small business from cybercriminals. If you have customers, you have data, and data breaches can create all sorts of lawsuits. Just recovering from a cybersecurity incident can be expensive. Talk to your agent about your business, and get the coverage you need.
Extra expenses coverage
Whatever happened that interrupted your business can create expenses beyond the limits of your policies. Extra expense coverage can help reimburse you for cost overages you incur during the restoration period.
In states like Florida that have a lot of coastline, wind damage is usually excluded from your business owner policy. For complete peace of mind when it comes to hurricane preparedness, a separate policy is available.
Floods go hand in hand with hurricanes. Your other business policies do not cover flooding. However, flood insurance is available through your agent and the National Flood Insurance Program. It doesn’t cover floods from broken pipes or leaks, but your property insurance has you covered on that front.
Only you know the amount of risk you’re willing to take, but smart entrepreneurs are insured. The average cost of a business owner policy is $750 to $1,200 per year. The average payout for a slip-and-fall incident with only minor injuries is between $10,000 and $50,000. It’s really a no-brainer. Run, don’t walk, to your insurance agent, and get covered!
Avante has customized business owner policies to meet your unique needs
Avante will work just as hard to build the complete coverage your business needs as you did to build your business in the first place. We’ll sit down and go over deductibles and coverage options and tailor policies that work for you. Reach out today, because life (and business) is unpredictable. At Avante, we’re always standing by.
This blog and website are made available by the publisher for educational and informational purposes only. It is not to be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state.