Is a Business Owners Policy Required?

At its most basic form, a business owners policy covers general liability and commercial property damage. These policies are geared to cover your business from the risks you could face during day to day operation.

General liability insurance covers accidents of bodily injury and property damage that may occur on your business’ property. Commercial property insurance covers your business’ physical structure and its contents in case of fire, wind, hail, lightning, smoke, theft, vandalism and more.

Neither of these insurance policies are required by state or federal law. There are times where you may be required to carry these insurances to work on certain projects or with certain clients, however. To sign contracts, a client may require that you at least carry general liability insurance to cover accidents that may affect them financially.

If you take out a loan or rent your business’ property, you may be required to carry insurance by your lender or landlord. This is in part to protect them from liability in case an accident occurs on the business property or your business’ equipment is damaged.

Who Needs a Business Owners Policy?
Business owners policies are geared to protect small businesses across low-risk industries. Any small business that wishes to combine coverages and save money should consider purchasing a business owners policy.

These policies don’t only cover general liability and commercial property, either. They can be expanded to include coverages such as:

Professional liability insurance covers accidents of professional negligence not covered by general liability. This insurance protects your business from claims regarding mistakes that may cause a client to lose money.

Employee practices liability often comes as part of a directors and officers insurance policy, although it can be purchased on its own. It covers the business from claims regarding employment practices such as discrimination, wrongful firing and hiring, sexual harassment and more.
Cyber liability covers your business in case of cyber attacks and loss of electronically kept information.
Commercial auto insurance covers vehicles owned or used by the business for work purposes. This insurance can include comprehensive coverage, collision coverage, liability, uninsured/underinsured motorist coverage, medical payments coverage and more.

What Business Qualifies for a Business Owners Policy?
Qualifications for a business owners policy vary depend on the industry. In some industries, 100 employees is considered “small” while 1,000 employees in another industry is still considered small.

If you have any questions about insuring your company or purchasing a business owners policy, be sure to speak with your insurance agent.

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