Small Business Owner Insurance Policies

There are several insurance companies that have bundled property and liability coverage into what is most often referred to as a business owners package policy (BOP). A BOP allows a business owner to obtain broad coverage with affordable premiums.

Even if you already have a small business owners insurance package policy, you will still want to consider adding coverage that might not otherwise be included. Since no two businesses are alike, you may want to have your small business owner insurance for property be tailored to fit your business’ needs. For instance, a restaurant will have needs much different than that of a furniture store. A retail business, likely dealing with a lot of customer interaction, will face a much greater amount of liability than a simple two-person accounting office. Because of this, liability above and beyond a standard small business owner package policy should most definitely be considered.

Typically, small business owner insurance package policies provide the small business owner with complete coverage a lower price than separate policies for each type of small business owner insurance needed. Additional coverage can also be purchased for property, liability, or perils and conditions that are otherwise excluded from the standard small business owner insurance policy. These forms of supplemental coverage can be purchased as endorsements to a standard policy, or a separate second policy, referred to as a difference-in-conditions (DIC) policy.

Other less common, but equally important, small business owner insurance types may include the following:

1. Boiler and Machinery Insurance – Even if a business does not own a boiler, it may benefit from this type of coverage. That is because this type of small business owner insurance provides coverage against the sudden and accidental breakdown of boilers, machinery, or other pertinent equipment, such as computer systems, and telephones/communications systems. This coverage typically includes reimbursement for property damage, expediting expenses, and business interruption losses.
   
   
2. Builders Risk Coverage – This type of small business owner insurance covers buildings in the course of construction. Depending on the policy, this coverage can be either for the building’s value at the time of loss or damage, or its full value at the time of completion.
   
3. Building Ordinance Coverage – This type of small business owner insurance provides coverage when a community has a building ordinance that states when a building is damaged to a certain extent (typically 50%), it must be fully demolished and rebuilt in accordance with present building codes rather than simply repaired. When establishing the amount of this small business owner insurance, it requires special attention to details.
   
4. Business Interruption Insurance – An insurance becoming more and more common these days, business interruption insurance covers the loss of earnings as a result of damage or loss of business property. The coverage provides reimbursement for salaries, taxes, rents, and other associated expenses plus net profits that would have been earned during the period of interruption.
   
5. Commercial Crime Coverage – This form of small business owner insurance pertains to the coverage of money and securities, stock and fixtures against theft, burglary and robbery, both on and off the insured premises, as well as from both employees and outsiders.
   
6. Debris Removal Coverage – This pertains to the removal of debris after damage from fire or other covered peril that requires debris removal before reconstruction of the damaged building can commence. This type of insurance is not part of fire insurance coverage, and must be added as an endorsement.
   
7. Fidelity Bonds – These cover business owners for any losses due to dishonest acts by their employees.
   
8. Glass Coverage – While most business owners may think this is included in a standard small business owner insurance policy, he or she is encouraged to double-check this. The reason for doing so is because most insurance companies require the glass coverage to be purchased separately. It provides coverage for glass breakage, including store windows and plate glass on office fronts.
   
9. Inland Marine – This type of small business owner insurance mainly covers property in transit such as from warehouse to warehouse or warehouse to retail store, as well as other people’s property left on business premises.
   
10. Insurance for Loss of Lease Income or Value – This covers the loss of income resulting from the damage of rental property and the loss of value when the owner of the rental property also used some of its space for business.
    
11. Umbrella Insurance – This important form of small business owner insurance pertains to a particular small business owner insurance or auto insurance that covers one when limits on his or her other liability policy has been past. Umbrella insurance simply minimizes one’s liability risk even more.
    

Because every business is unique, so are their insurance needs. It is impossible to have a standard small business owner insurance policy that will adequately cover all contingencies. Additionally, some businesses, without regard to their size, do not fit the profile of a standard small business owner insurance policy. Some of these businesses may include restaurants, wholesalers, and garages that have special liability needs. The types of small business owner insurances are indeed numerous and complex.

As a business owner, one of the most important decisions you will ever make is getting the proper insurance coverage for your business. Going without small business owner insurance is not only detrimental should an accident, lawsuit, or other peril occur, but it also may violate legal requirements for businesses in your state. There is an entire world of things that can happen to your and your business. Why risk it? Not protecting yourself and your business with the right insurance can cost you far more than any insurance premium ever will.

Another note of importance is this: business owners who make it a point to educate themselves or get educated on small business owner insurance are more likely to succeed in their field. Getting the right kind of small business owner insurance essentially means avoiding the most common mistakes made when trying to get the best insurance policy for your business. If you know what some of these mistakes are beforehand, you can surely do your best to avoid them in the future.