Business insurance provides businesses with protection against property damage, lawsuits, and income losses caused by unexpected events. Renting commercial space often requires business insurance as it helps manage risks from such events.
Many policies combine several coverages into one convenient package, making risk management simpler. A Business Owner’s Policy (BOP), for instance, includes general liability, commercial property, and business interruption coverages in its portfolio.
1. Business Owner’s Policy (BOP)
A Business Owners Policy, or BOP, combines general liability and property coverage into one comprehensive policy to save businesses money. You can tailor it specifically to fit the needs of your company; such as including restaurant spoilage insurance to cover food loss from power outages at stores.
Although not every business qualifies for a BOP policy, insurance providers typically take into account factors like industry, size, and risk profile before offering such policies to businesses. High-risk businesses that require increased liability limits might want to opt for a commercial package policy instead; these policies are specifically tailored for larger enterprises that face complex liability exposures and property exposures.
2. General Liability
General liability and commercial auto policies are indispensable for any small business, covering damages caused by you or one of your employees to others’ properties, as well as protecting you against lawsuits alleging negligence. Most policies contain an aggregate limit or per occurrence limit for claims paid out during their respective policy term.
More and more clients are contractually requiring vendors to carry this coverage before agreeing to work with them. BOPs or standalone policies can include this coverage; other versions include errors and omissions insurance to cover legal expenses associated with negligent professional services provided by your company.
3. Commercial Property
If your business owns property that can be easily lost or damaged – such as buildings, inventory, or equipment – commercial property insurance provides crucial coverage against theft and burglary – common risks faced by small businesses.
Licensed agents can assist in selecting the appropriate business insurance policies. They can compare coverage options, terms, and prices to find what fits best for your business. While some agents are affiliated with specific insurers and offer only their products; others are independent agents who sell multiple policies from various carriers.
4. Business Interruption Insurance
Business Interruption Insurance (BI) is an optional coverage that can be added to a commercial property policy and helps cover financial losses when physical damages interrupt business operations.
An initial requirement of making a Business Interruption claim is that any loss must have resulted from direct physical damage to your company’s premises, for instance, a restaurant could qualify if a kitchen fire causes it to close for repairs.
Your business must also experience a “restoration period.” This timeframe begins from when physical damage occurred until when it can reasonably be expected that property will be repaired or replaced.
5. Business Auto
Vehicles play an essential part in businesses of all kinds, from transporting goods or people to servicing clients and more. A local agent will help identify which cars, trucks, and other vehicles your organization requires for efficient operations; discuss usage among employees as well as potential drivers; discuss additional insured coverage needs; and determine who needs access.
An accident involving your company vehicle could expose it to significant liability, so higher liability limits are usually necessary. Furthermore, business auto policies typically include comprehensive and collision coverage which helps safeguard company cars when not in use.
6. Business Crime Insurance
Your business can protect itself from losses that could otherwise bankrupt it at an affordable premium, including theft of general property, forgery (if an employee alters checks or payment authorization forms), funds transfer fraud including money orders and wire transfers, and many other potential dangers.
Coverage under this umbrella policy can either be included as part of an owner’s policy or purchased separately. It covers losses caused by internal (employee) or external (criminal) perpetrators and tends to be less expensive than legal action alleging theft from employees or criminal acts.
7. Employee Dishonesty Insurance
Employer Dishonesty Policies Can Benefit Businesses A wide array of companies can find value in including an employee dishonesty policy in their business insurance plans to mitigate losses associated with internal theft, fraud, and general bad faith activities. This type of coverage helps minimize losses caused by such instances as internal theft, fraud, and other forms of improper behavior within an organization.
Crime policies (also referred to as fidelity bonds) provide companies with protection for their property against theft by their employees, such as cash, securities, computers, and credit card fraud. Coverage may be provided either per loss, position, or employee basis.
Fidelity bonds typically only cover theft of company property, not those belonging to customers, vendors, or clients.
8. Business Crime Insurance
Business crime insurance (or commercial crime policy) protects companies against theft, forgery, money transfer fraud, and other crimes associated with their operations. This type of coverage typically comes as part of a standalone policy rather than being included as part of larger package policies.
Business crime policies typically cover crimes such as robbery, burglary, funds transfer fraud, and electronic crimes that take place at company locations or offsite locations such as banks and airports. They can provide coverage against losses in terms of both money and securities that arise as a result of such offenses.
Though internal procedures can help lower risk, even well-run companies face fraudsters and the need to invest in a strong business crime policy is important.
9. Business Crime Insurance
Businesses pay premiums to cover risks they cannot manage on their own. Generally, the size and assets of a business determine how much insurance coverage it needs.
Commercial crime policies offer businesses protection from losses of money and securities on their premises or while in transit, as well as from forgeries of checks or payment authorizations. They may be purchased individually or included as part of an industrial package policy (multi-peril policy).
Strong internal protocols may help mitigate risk, but dishonest employees and outside fraudsters may bypass even well-established security measures – this is why most commercial property or business owner policies exclude employee theft coverage from their policies.
