Business Owners Policy. As many as half of all businesses are involved in a lawsuit within any particular year, according to the U.S. Small Business Administration. At some future point, even the smallest business is subject to being called into court to answer to a charge of negligence or liability. Carrying business insurance such as a business owners insurance policy or BOP policy is important to continuing the growth and success of your business uninterrupted in the event of a claim, catastrophe, or peril.
Vandalism, theft, and fire are all known perils that can close your business down permanently. Many business owners find that their businesses simply cannot recover after a devastating loss. A business owner's policy protects your business from the risks faced in a perilous situation. This policy provides both liability insurance and property insurance in one custom-tailored package based on your business' needs. If you own a small or mid-sized business, this policy is right for you.
A business owners policy protects your company from lawsuits with rates as low as $27/mo. Get a fast quote and your certificate of insurance now.
Many retail or wholesale operations, artisan contractors, or convenience stores, grocery stores and supermarkets with or without gasoline pumps are eligible.
Small to medium-sized apartment risks, condominium properties, offices, non-manufacturing businesses, and a limited number of service and processing risks are also eligible. Restaurants are also eligible. However, many insurance companies file their own deviations to the eligibility criteria and offer numerous options.
It is not unusual for some of them to insure some manufacturing classes and larger retailers under the Businessowners Coverage Form or an enhanced version of it.
The ISO Businessowners Coverage Form uses the homeowner's policy approach to package insurance coverages for eligible businesses. By selecting an amount of insurance on building and/or business personal property, the insured automatically receives a broad range of additional coverages with a single indivisible package premium. It is designed for the following:
The ISO Businessowners Coverage Form is made up of three major sections:
Buildings can be more than just a single building. he insurance company pays for direct physical loss or damage to covered property at premises listed and described on the declarations but only if the loss or damage is caused by or that results from a covered cause of loss:Covered Building Property
Business personal property (BPP) is more than just the contents of a building. The following business personal property is covered when a limit of insurance appears on the declarations and when it is in the described building and within 100 feet of the premises or building while in the open or in or on a vehicle:
The insuring agreement requires the insurance company to pay amounts an insured becomes legally obligated to pay as damages because of bodily injury, property damage, or personal and advertising injury as long as this insurance provides coverage. Damages include care, loss of services, and death. This obligation includes a duty on the insurance company's part to defend any suit that seeks damages. The duty exists only if the loss is or may be covered and ends only when loss payments use up the limits of insurance.
The coverage form identifies situations that are covered as well as those that are excluded. It also specifically states that coverage applies to only incidents that are not carryovers from prior policies or prior policy periods. Much like a general liability policy, the liability coverage offered by a BOP:
These conditions apply to both liability and property:
If you've been teetering on the fence and unsure if a BOP policy is right for you, then dispelling some of the myths surrounding these policies is a good move. Let's look at some common misnomers about business owners insurance policy policies.
Myth: BOP policies are for big businesses; my business is too small for a BOP policy.
This is an absolutely untrue statement. This type of policy is actually not an option for big businesses; it's tailor made for small and mid-sized businesses.
Myth: General liability covers property loss and business interruption costs.
This is also untrue. General liability insurance will not protect your business from either of these inherent risks. General liability insurance is only for acts that occur due to your actions or that occur on the premises of your business.
Myth: An umbrella policy is sufficient for covering business equipment losses.
Again, untrue. This type of policy covers personal liability, not business liability. It does sometimes extend to cover business equipment under a specific set of circumstances, but the coverage is limited.
Myth: Your business is safe since it is an incorporated business with just one location or operating from the owner's home.
Although the incorporation of your business does make it its own entity legally, any attorney worth his salt can easily finagle his way around the corporate "veil" to find a business owner personally responsible. With a business owners insurance policy policy, the liability portion of the policy protects your personal interests.
Myth: You're safe because you're incorporated, only have one location, or are home-based.
While incorporating will make your business a separate legal entity, any knowledgeable lawyer can find a way to remove that corporate protection and make you personally responsible, putting both your business and personal assets at risk. Incorporating offers zero protection against “tort” wrongs, which are judgments related to negligence, malpractice, car accidents and even slips and falls on your property. Luckily, the liability portion of a business owners insurance policy protects you against these risks.
Moreover, if you work from your home and rely on a conventional homeowner's policy to guard against business liability, you may find yourself sorely discouraged when your policy specifically rules out business operation in its terms. A better practice is to buy a separate policy so that your insurer understands that business and home are separated, and liability in one doesn't translate to liability in another.
Myth: Your work is conducted at your client's location, so a BOP policy is useless.
A BOP policy is essential if you are conducting business on site. Electricians, caterers, and others who work in people's homes put themselves out there as far as liability goes, and an accident at a client's home or damage to a client's property can leave you holding the bag without an effective BOP policy in place.
Myth: A BOP policy is not essential because the client doesn't require it.
A BOP policy isn't really about protecting the client. At its core, it protects your business. Even if the clients has no opinion about your insurance coverage, protecting yourself from litigation, claims, and loss means having the right coverage in place at all times. Moreover, buying a BOP policy for a short time and then dropping coverage can make your policy cost more in the long run.
Myth: Your contract with your client protects you from liability.
Think again. While having a strong contract in place is always a good idea, the truth is that lawyers can always find an angle to sue, despite the contract's language. Even if the claim has no merit, the cost of defending yourself in court can be astronomical and leave a dent in your business' financial health.
Myth: BOP policies are too expensive for my business.
The opposite is true. business owners insurance policy policies are affordable, and the risk they mitigate is priceless. Most people spend just a few hundred dollars per year for a basic BOP policy. This is a small price to pay for peace of mind in knowing that your business is protected. An independent agent can compare rates with multiple insurers to help you find the right coverage for your budget.
The type of business you own, the number of people who work for you, and your sales into how much you pay for bar insurance. The location of your business, your claims history, and other important factors also play a part. Work with your licensed commercial agent to find a mix of quotes from insurance companies. This can make it easy to get the right policy for your specific needs.
The pipes of the rooftop cooling system of Seaport Park Condominium (Seaport) burst on January 12, 2004, allegedly due to freezing temperatures. Seaport had purchased a Businessowners Policy effective September 30, 2013, from Greater New York Mutual Insurance Company (GNY) providing coverage on the seven-story condominium apartment building.
A claim was submitted to GNY. Expert adjusters were retained to inspect the damage and determine the cause of loss. The burst pipes were believed to be in the interior of the unit and a conclusion could not be reached. At a meeting of all interested parties, it was agreed that Matco, Seaport’s contractor, would remove the old tower and install a new one and would store the old tower for further inspection. Matco, however, destroyed the tower.
GNY denied the claim based upon a condition of the policy that required Seaport to preserve the damaged property for inspection. Seaport commenced an action against GNY. The motion court cited the absence of documentation stating that further inspection of the tower was needed and any obligation to store the cooling system once it was removed from the building when it ruled in favor of Seaport. GNY appealed.
The decision was reversed because the insurance contract was between Seaport and GNY and it required that damaged property be available for inspection. Agreements between Matco and Seaport and the error on Matco’s part did not relieve Seaport of that responsibility.
(Seaport Park Condo. v. Greater New York Mut. Ins. Co., 39 A.D.3d 51, 828 N.Y.S.2d 381 (2007))
Daniel G. Parmelee or Aquila Group LLC (Seller) signed a conditional real estate report indicating that it was not aware of the existence of asbestos on the premises of an apartment building it was selling. Phillips (Buyer) acquired the property. Asbestos was discovered in the building by their contractor when it cut asbestos-wrapped ducts which dispersed asbestos throughout the building. Buyer sought action against Seller.
Seller insured the apartment building under a businessowners policy from American Family Mutual Insurance Company (American) at the time of the sale and so requested that American respond to the action. American denied coverage based upon the asbestos exclusion and filed for summary judgment. The circuit court concluded that American had no duty to defend because the exclusion precluded coverage.
The decision was appealed by Buyer, which alleged breach of warranty and negligence in the failure to report asbestos in the structure. The asbestos exclusion read [in part], "This insurance does not apply to ... "property damage" ... with respect to:
Any loss arising out of, resulting from, caused by, or contributed to in whole or in part by asbestos, exposure to asbestos, or the use of asbestos. "Property damage" also includes any claim for reduction in value of real estate or personal property due to its contamination with asbestos in any form at any time.
Buyer contended that the exclusion did not specifically state that it applied to the "dispersal" or "presence" of asbestos. Both the Appellate court and the Supreme Court of Wisconsin affirmed the decision based upon the wording “any loss” within the exclusion.
(Phillips v. Parmelee, 2013 WI 105, 351 Wis. 2d 758, 840 N.W.2d 713)
Perhaps you have the next great idea for a product or service that you know will appeal to your local area. Maybe you want to contribute to the economic growth of your community. Whatever the reason is, if you're thinking about starting a small business, it's important to understand pertinent information relating to small businesses in the United States; namely economic information and insurance regulations. After all, if you want your small business to succeed, you have to understand the economic trends organizations of a similar size in your area.
Likewise, you want to ensure that your small business is well protected with the right business insurance and that you are in compliance with the rules and regulations that pertain to commercial insurance in your region.
Read up on economic statistics and insurance information that relates to small business owners in the United States.
Here's a look at some information that was compiled by the Small Business Association (SBA) regarding the economic data that pertains to small businesses in the United States:
In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.
The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.
According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage. The SBA recommends the following insurance plans for small business owners:
Protect your company and employees with the right commercial insurance policies. Read informative articles on small business insurance coverages - and how they can help shield your company from legal liabilities.
Your small business faces many potential disasters including: fire, floods, theft, equipment breakdown, lawsuits from clients or customers and current & former employees. Any many other risks you haven't even thought about.
A small business commercial insurance program should provide protection for both larger and smaller disasters. The obvious things like fire, flood and theft most business owners think about... but what if a hacker infects your computers with a virus - and files containing private customer information like credit card and Social Security numbers are stolen?
Who is going to pay to fix your customers credit rating etc...? Will your insurance pay for the cost? You need to know that.
Your commercial insurance program should cover events that can close down your company, or cause it to lose revenue. Anything less than that is not enough coverage. Commmercial insurance doesn't cover everything, and all policies have exclusions and limits.
You need a written plan that allows you to get your operations back up and running as quick as possible.