The Basics of a Business Owners’ Insurance Policy

Many small business owners mistakenly believe that they need only a general liability insurance policy to protect themselves from all potential losses. But that is not true. A general liability policy does not provide coverage when it comes to property. For that, you need commercial property insurance, which is part of a business owner’s policy.

What is a business owner’s policy?

A business owner’s policy combines general liability insurance with commercial property insurance. With both types of policies wrapped into one business insurance policy, you are covered from a variety of claims.

What is the difference between general liability insurance and commercial property insurance?

The general liability insurance element of a business owner’s policy provides protection from lawsuits resulting from things like a customer sustaining an injury after slipping on the floor of your offices, a defective product damaging a client’s property or the items you manufacture injuring someone. It can also protect you from libel and slander and some other claims related to advertising.

The commercial property insurance element of a business owner’s policy, on the other hand, provides protection for business property you own or rent. This includes buildings but also equipment, furniture and inventory. It also includes property that is not owned by you but was in your care at the time it was damaged. This type of insurance policy helps cover repair or replacement costs for stolen, damaged or destroyed property. Depending on the policy, it can also cover loss of income and help you pay for certain financial responsibilities, such as rent and payroll, while your property is being repaired or replaced after a covered loss.

How much does a business owner’s policy cost?

The cost of a business owner’s policy is not set in stone. It is based on a number of factors: your industry, your location, the size of your business and the amount of coverage you need, for example. There can be cost savings, however, when you purchase a business owner’s policy instead of separate general liability and commercial property insurance.

Why do I need a business owner’s policy?

All business owners need general liability insurance: it’s the bare minimum needed to protect your business in case of a loss. But a business owner’s policy also provides commercial property insurance, which you likely need if you own or rent your office, you rely on tools or equipment to do your work or you maintain inventory.

What else should I consider?

Most insurance companies allow you to customize your business owner’s policy so you pay for what you really need. For example, you can add hired and non-owned auto coverage, which provides protection for companies that rent, lease or borrow vehicles or allow their employees to use their personal vehicles for company business. Or you can add cyber liability coverage, which protects your business against the costs of data breaches and other cyber security issues.

What next?

We can help you review your current insurance coverage and determine if you need more insurance, including a business owner’s policy. Call or email us today.