By Nicole Markle
When you buy business insurance, you may opt for a common package known as a business owners policy (BOP). A BOP typically consists of several key types of coverage wrapped into a single policy, and it’s an important basic for many small business owners. BOPs can be a great starting point to help protect your business against risks. But when your business is expanding, you may want to acquire additional coverage.
First, you need to understand your BOP, so you can determine if there are potential gaps in coverage that are specific to your business operations.
Coverage in a Typical BOP
A BOP typically consists of several key types of coverage wrapped into a single policy, and it’s an important basic for many small business owners.
- Property coverage can reimburse your business (up to your policy’s limits) for losses or damages to your office or building after a covered event, like a fire or robbery. Property coverage also helps protect your business’ inventory, equipment, furniture and other items inside your office.
- Liability coverage can help pay for medical and legal expenses if your business is found liable for injuries or other damages to another person or entity.
- Business interruption (aka business income) coverage can help replace your business income if you have to close because of damage to your building after a covered loss (such as a fire).
Additional Coverages to Consider
As your small business grows, you may incur new risks and find that you need additional protection beyond your BOP. The following are some common business insurance coverages you might want to consider.
- Business auto coverage can help protect company vehicles in case of collision, theft and more, depending on the type of policy you choose. Perhaps your company started small, but you’ve expanded and customer visits and deliveries are now a key part of your business. It may be time to upgrade to business auto coverage, since your personal auto insurance typically won’t cover company vehicles or personal vehicles used for business purposes.
- Data compromise coverage can help reimburse your company for expenses related to a data breach. If customers’ or employees’ private information is compromised and stolen from your company, this coverage can help pay for legal fees, as well as help cover the cost of notifications and credit-monitoring services for those affected by the breach.
- Employment practices liability coverage can help pay for legal expenses and settlement/judgment costs if a current or former worker sues you for wrongful termination or discrimination. EPL coverage typically helps pay for your legal expenses in these situations — even if you ultimately lose your case, according to the Insurance Information Institute.
For more information, talk to an experienced business insurance agent about which add-ons to a BOP would be good investments for your company.