A business owners policy is a combination of coverages designed to protect small businesses from various risks they face during operation. As such, only small businesses in low-risk industries may be covered under a business owners policy.
What Does a Business Owners Policy Cover?
A basic business owners policy combines general liability and commercial property insurance.
General liability insurance covers bodily injury, property damage and personal or advertising injury. If someone is injured on your property, for example, general liability insurance can help pay for their medical bills as well as protect your business against a possible lawsuit related to the accident. Accidents should be covered for all of your employees.
Commercial property insurance provides compensation if your business’ physical property is lost or damaged due to fire, wind, hail, lightning, smoke, falling objects, theft, vandalism and more.
These are only the two main coverages, however. Business owners policy are made to be flexible in order to allow business owners to add coverages needed for their specific business and industry. Coverages you may consider adding to your business owners policy include:
- Professional Liability: Professional liability insurance covers professional negligence that may cause a client to lose money. This insurance can cover any specialists or professionals you employ, although some professionals also choose to carry their own policy.
- Directors and Officers Liability: Directors and officers insurance covers key employees of your business, such as directors, officers and managers. This insurance covers your key employees from lawsuits concerning their activities while serving on the board. It may be extended to include employment practices liability, which covers claims of discrimination, wrongful firing or hiring, sexual harassment and more.
- Cyber Liability: Cyber liability insurance covers accidents regarding the theft, destruction or damage of information kept electronically. For example, if your business’ computers are cyber attacked and your clients’ information breached, cyber liability insurance can help pay for recover costs and legal expenses.
- Commercial Auto Insurance: Commercial auto insurance is an auto policy that covers commercial vehicles used to owned by a business for work purposes. A full coverage policy may include comprehensive coverage, collision coverage, liability, medical payments coverage and uninsured/underinsured motorist coverage.
Be sure to ask your insurance agent about additional coverages you may use to protect your business from different liability and physical property risks. There are many types of coverages available that can be tailored to specific industries.
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